Air New Zealand's business units will work with unions on cost saving measures. Photo / Supplied
Air New Zealand's business units will work with unions on cost saving measures. Photo / Supplied
Air New Zealand is working with unions on a series of measures to cut costs as the airline hunkers down to deal with the worsening coronavirus impact on travel.
Following a meeting with four workers' groups yesterday, it was agreed to meet weekly on measures including a hiring freeze onnon-critical roles, voluntary unpaid leave and using unused leave balances. Options for temporary redeployment among its 12,500 staff were also being explored "where appropriate".
In a joint statement sent to staff by chief executive Greg Foran, he said individual business units would now work with their union partners on the initiatives.
The airline, which saw already weak demand plummet at the end of last week, has withdrawn its full-year profit guidance because of uncertainty over future earnings and has slashed capacity across its network by 10 per cent.
"As an organisation, and as unions, we have not faced a situation like this before. As a group, we recognise this is unsettling for Air New Zealand employees and are committed to sharing information as it becomes available," Foran said.
"From a business perspective, it is clear this is a significant issue that is impacting the aviation and tourism industry globally."
Air New Zealand's leadership ran through what is likely a bleak picture of future demand with leaders from the Aviation and Marine Engineers Association, E tū, the Federation of Air NZ Pilots and NZ Air Line Pilots Association.
In the newsletter Foran said while some of the information being shared with union leaders was confidential and commercially sensitive, the group had agreed it was important to be as open as possible with all Air NZ staff.
During this meeting, the airline's chief medical officer, Ben Johnson told union leaders that, across the aviation industry, no airline employees or passengers have contracted Covid-19 while travelling on an aircraft.
"This has provided reassurance that people working in the aviation industry are at no greater risk than anyone else in the community," Foran said.
Korean Airlines has warned it faces a battle to survive. Photo / Supplied
He volunteered to take a 15 per cent pay cut to his $1.65m salary, a move that has been made by other airline chief executives in this region.
Airlines around the world are slashing capacity by even more than Air NZ in what is shaping up as survival of the fittest.
The evaporation of bookings by businesses - under legal obligation to minimise risk of staff travel - have rocked airlines as this is among the most lucrative market for them.
The outlook for flying leisure passengers to meet cruise ship departure points is worsening by the day with New Zealand following Australia and the United States in warning that those with underlying medical conditions should reconsider.
Korean Air Lines has warned that the coronavirus outbreak could threaten its survival after more than half of the world restricted passengers entering from South Korea.
Reuters reports more than 80 per cent of South Korea's biggest carrier's international capacity had been cut as a result of travel restrictions globally, compared with an 18 per cent reduction during the 1997-1998 Asian financial crisis.
"We can easily imagine the severity of the crisis we are facing in comparison. And what is more daunting is that the situation can get worse at any time and we cannot even predict how long it will last," Woo Kee-hong, Korean Air's president said in a memo to employees.
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Korean Air had grounded about 100 of its 145 passenger aircraft, adding that its self-help measures so far included deferring investments, cutting down on operational expenses and encouraging employees to take voluntary leave.
"But if the situation continues for a longer period, we may reach the threshold where we cannot guarantee the company's survival," Reuters reports.
