Air New Zealand jobs: What green shoots in domestic network mean

Air New Zealand's domestic operation will soon be at 65 per cent pre-Covid levels. Photo / Andrew Warner

In the airline industry desperately short of good news about jobs, there is a sliver of it in New Zealand.

Domestic air travel has rebounded more quickly than forecast meaning a 180-degree turn at Air New Zealand on some roles.

The airline's chief executive Greg Foran said in a newsletter to staff that 100 cabin crew on its domestic jet and turbo prop fleet have had their redundancies rescinded.

This is only a small proportion of the 1300 cabin crew who have been laid off and a smaller fraction of the total of 4000 staff who have lost their jobs - with more losses possible. But it is an encouraging sign of strength in the domestic market.

And Qantas - which yesterday revealed the loss of 6000 jobs - has reassured a union that its 700 New Zealand-based crew were not part of that announcement.

E tū union says it has been assured by management that Jetconnect, the Kiwi-based crewing agency for the Qantas Group, remains an important part of the group's future.
Jetconnect has advised the union that they do not want to reduce their staff numbers permanently.

However, E tū union members still face a situation where they are on leave without pay until the end of 2020, says E tū team leader Amy Hansen.

At Jetconnect, cabin crew are up to 90 per cent unionised and the union is working very closely with the company to ensure cabin crew members ''have a voice in addressing the challenges the business is facing".

While there is the prospect of short-haul cabin crew working again once the transtasman route reopens, those in long-haul may not have work until long international flights from Australia are able to resume.

And the news coming from Qantas is not positive on that especially as community-based Covid-19 flare-ups occur in Australia.

Chief executive Alan Joyce has some hopes of an earlier of flying across the Tasman, but he is not expecting anything like normal international operations before July of next year.

The airline has parked 100 planes, many in deep storage including its 12 A380s which won't fly again for at least three years.

Qantas owns Jetstar which is resuming 60 per cent of its normal domestic service in this country from July and Hansen says demand is looking very strong for the next two months and most of the union-covered cabin crew will be back flying by then.

Air New Zealand says heading into the July school holidays it will be operating around 65 per cent of its pre-Covid schedule, with destinations such as Nelson, Napier, Palmerston North and Tauranga proving particularly popular from Christchurch.

Tourist-starved Queenstown has been a standout, with more bookings and capacity than this time last year reflecting the willingness of Kiwis to fill the gap left by Aussies who flocked to the ski fields.

Australian-based analysts Capa says that New Zealand domestic air capacity will bounce back to 80 per cent of pre-Covid levels by the end of the year.

This country was the world's 30th largest domestic aviation market globally before the Covid-19 crisis.

''Air New Zealand enjoys an envied position among world airlines – a domestic market free from Covid-19 transmission. New Zealand took bold action to lock down and has defeated the first wave spread of the virus, paving the way for a more rapid recovery in domestic airline capacity in the initial phase,'' said Capa chairman Emeritus, Peter Harbison.

Snowboarding at Coronet Peak Queenstown, Kiwis are flocking to the resort town. Photo / Supplied

''As demand rebuilds, domestic seat capacity and route networks will be adjusted to optimise yields. In the absence of most international tourist markets feeding into the domestic network, however, we expect only a steady domestic aviation recovery.''

Yields will be the trick for Air New Zealand. While there are signs of a recovery of business and government sector bookings, they are tracking at around half of normal levels.
They're crucial because those tickets are booked late, typically at the front of the plane and fully flexible so they're expensive.

Travel software company Serko has forecast business travel coming back in Australasian markets by between 40 per cent and 70 per cent of pre-Covid levels by March of next year.

One Auckland hotel has this month seen its weekday bookings running at just a third of weekend leisure occupancy.

Airlines face a structural change for their corporate markets. The video conferencing technology worked well during lockdown and will be used more frequently from now to save money and to cut down the risk of breaching duty of care obligations to staff.

The other problem airlines face is demand being very lumpy, a constant problem and much worse during a pandemic. Domestic demand in China was recovering steeply until a Covid-19 outbreak this month in Beijing threw capacity growth into reverse.