Covid 19 coronavirus: Air New Zealand sub-letting office space as head office jobs go

Air NZ has been in its Fanshawe St headquarters since 2006. Photo / Alex Robertson

Ahead of what will be one of its worst financial results in its 80-year history, Air New Zealand is looking to sub-let space in its Auckland headquarters.

There have been hundreds of redundancies among its white-collar workforce and the airline is looking for tenants for up to a third of its Fanshawe St building, known as The Hub.

Colliers says Air New Zealand has identified an ''opportunity to optimise'' its footprint at its head office and can make available from 845sqm to 5000sqm of fully fitted office space.

That would allow space for up to 500 workers. When Air New Zealand took the lease on the building in 2006, about 1000 staff moved in.

An airline spokeswoman said; ''We are reviewing all of our costs as we navigate our way through Covid-19 and as part of this we are considering subletting some of the Auckland hub office.''

Colliers says there are two fully inter-connected six-level buildings which can provide a range of configuration options to an incoming tenant.

''One of the most sought-after precincts in Auckland, this is a unique opportunity to secure fully fitted turnkey office on flexible terms.''

The building's proximity to the waterfront makes it attractive for businesses with an interest in the America's Cup.

In 2018 the building was part of a portfolio sold by Goodman Property Trust (51 per cent owner) and partner Singaporean sovereign wealth fund GIC to funds of giant United States investor Blackstone. The previous year, Air NZ had renewed its lease for 10 more years.

Tomorrow the airline will report its full-year result to June 30, which it has warned will be an underlying loss with more than half a billion dollars of one-off costs.

In a market update in late May, the company said it would feel the impact of $85m-$105m from fuel hedging de-designation, aircraft impairment charges of $350m-$450m, and reorganisation costs of up to $160m in the full financial year.

More than a third of its staff of 12,500 have been laid off, with little prospect of international services recovering from the skeleton network it has in place until well into next year, and its domestic flights again being hit by travel restrictions in this country.

Air New Zealand last recorded a full-year loss in 2002, in the wake of its near collapse.

The airline needed an $885m Government bailout after its disastrous investment in Ansett Australia and impact of the 9/11 terror attacks on air travel in 2001. It plunged to a $1.4 billion loss that year, a $318m loss the following year but turned that around to report a $165m profit in 2003.

In tomorrow's result there will be interest in the timing of drawing down of any of the Government's $900m backstop loan and whether the airline has any plans to raise capital from private sources as Auckland Airport and Qantas did earlier this year.