Mike Hosking talks to former boss Rob Fyfe, Air New Zealand burning cash, needs help
Former Air New Zealand chief executive Rob Fyfe says the airline will be burning cash and needs the country's help to get through the coronavirus crisis.
The airline today announced it would bring forward the closure of its London cabin crew base.
The London base of 130 flight attendants is staffed mainly by a crew based in Britain and Europe and comes as the airline moves to make up to a third of its 12,500 staff redundant.
The airline is also suspending its Argentina service immediately.
Fyfe said today the airline was facing an unprecedented challenge.
"The challenge is you have to get on top of your cost base. It costs $450m a month to run the airline. The revenue has fallen away very rapidly. You have to cut costs."
His comments on Newstalk ZB come ahead of today's release of details of a $600 million Government aviation aid package, part of the wider $12.1 billion economic support package unveiled this week.
Air New Zealand had planned to close the cabin crew base with its withdrawal from the route in October 2020.
Fyfe said staff throughout the airline would be very stressed
"You've got to be very open, you've got to be very transparent, you can't sugar coat any of this stuff obviously."
He said the airline would look very different after the crisis had passed.
"The team will be figuring out whether it comes back to what it was prior to this. I suspect not."
Fyfe said Air NZ was "incredibly important" to the New Zealand economy so needed to survive. It is in talks with the Government - which owns 52 per cent of the company - about a funding package.
"They're burning a lot of cash at the moment so they will need the support of the country to see their way through this."
The airline placed itself into a trading halt on Monday to allow it time to fully assess the operational and financial impacts of global travel restrictions. The trading halt remains in place.
Fyfe said New Zealand tourism may never recover fully.
"My perception is that the world is not going to be the same out the other side of this."
He also took a swipe at the Government's failure to close borders.
"You have to move fast and you have to move hard - I think as a nation we haven't moved hard enough yet particularly around borders, testing, the movement of people around the country," he said on ZB.
"I'm amazed we still think it's right to have people coming to New Zealand for a holiday. For God's sake - it's nuts right? We should be closing our borders and only letting nationals and citizens move into the country."
