Focus Live: The Government is handing Air New Zealand a $900 million lifeline as it copes with the coronavirus fallout.
Airlines last year were desperate to recruit pilots - now they're racing to let them go.
Air New Zealand proposes to make nearly a quarter of its 1800 pilots redundant as it fights for survival. Virgin Australia's shut-down of its New Zealand operations mean 200 Kiwi pilots are outof a job there and a similar number face uncertainty as Qantas and Jetstar operations flying across the Tasman and around this country have been slashed to thin skeleton services.
Late last year corporate jets had to be grounded because their pilots were being gobbled up by airlines. The near collapse of all air travel means thousands are now out of a job.
There were ominous signs from China two months ago when hundreds of airline pilots - who had been enticed by some of the highest salaries around - were suddenly out of a job and without any union protection.
Last year's Boeing estimates that 800,000 pilots will be needed over the next 20 years now seem to be from another universe. However, assuming a recovery that is much more painful and slow for airlines than any other previous shock, losing experienced pilots presents a mighty challenge to airlines. They're squinting to see it now but history suggests a recovery will come.
Pilots are very well paid at the top end. Air NZ Boeing 777 captains make a basic salary of around $330,000 before about 30 per cent more of flying pay is added. But the bulk of its pilots make much less than that, with turbo-prop pilots on regional routes starting on about $65,000 a year.
Their union, the NZ Air Line Pilots Association, says these are the staff who will be at he vanguard of the recovery when flying does resume to the regions and their permanent loss to the airline would be a double blow.
A grim outlook for Air NZ has led to staff cuts. Photo / Grant Bradley
Pilots add to a what was a labour bill of $1.3 billion a year for Air NZ. The airline has a semblance of a network but no-shows often outnumber booked passengers, is performing repatriation flights and a growing number of important freight flights. Cargo is king but all this limited flying that is not going to go anywhere near making up for $5.5b of lost revenue and utilising its 1820 pilots.
But most of its fleet is grounded and it the airline has realistic near-term ambitions of growing slowly as a domestic operation. The view within the airline is that the only way to survive, and to be part of this modest recovery, means going into hibernation.
Pilots' union, the NZ Air Line Pilots' Association, has for the past three weeks been working its way through negotiations with Air NZ bosses, including chief executive Greg Foran, but now it's getting to the pointy end of the process.
They have been told the airline proposed to make 387 pilots redundant as "the most economically efficient surplus" resulting from the proposed Air New Zealand flight schedule.
The union is pragmatic, jobs will go - the sight of parked-up planes can't be ignored. But it rightly says due process must be followed and wants to make sure there's a return flight path for those laid off.
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''If we cannot save every job, NZALPA would fight to ensure there is a clear and transparent path back to Air New Zealand for all pilots who chose to return," says association president, Andrew Ridling, a Dreamliner captain.
Cuts at Air New Zealand could mean the loss of a third of its total workforce of 12,500 and like all employers it faces the extremely complex and legally fraught challenge of laying staff off fairly during an alert level 4 lockdown.
Stepping in to one of the most challenging HR jobs around is Joe McCollum who becomes chief people officer after Easter.
In an industry switcheroo his last job was at Spark and he takes over from Jodie King, who announced well before the Covid-19 meltdown that she was leaving the airline for Vodafone New Zealand.
McCollum has HR experience for global chemicals giant ICI in Britain. He has also worked across the software, music and media industries. To beef up HR, the airline has contracted Paul Diver of Three60 Consult to help McCollum ''with the workforce change management process currently underway''.
Just as new chief executive Greg Foran can cast an outsider's view over the airline, these two new recruits can be similarly dispassionate. They're seen as experienced campaigners but their enormous challenge is not to break the hard-won collaborative approach to industrial relations (high performance engagement) at the airline and ensure that those who remain still want to call themselves ''Air New Zealanders'', with the pride most staff have for years.
