With Covid-19 stopping most worldwide travel, Will Trafford talks to aviation writer Grant Bradley about the challenges faced by Air New Zealand. Video / Will Trafford
A union has blasted further staff cuts at Air New Zealand as ''appalling'' at the company which has received hundreds of millions of dollars in taxpayer money this year.
Air New Zealand has today confirmed the loss of 385 cabin crew roles that had been under review for the last two months.
E tū head of aviation, Savage, said international cabin crew on the 777 and 787 fleets have been worst hit by the layoffs at Air New Zealand, with 85 per cent of them losing their jobs.
Close to 4400 job losses have been announced since the beginning of the year. The airline has been paid close to $150m in wage and freight subsidies this year and has started drawing on a $900m loan - on which it is paying interest of between 7 per cent and 9 per cent.
Savage said it had warned in March that Air New Zealand was moving ahead at pace without taking into account the damage that might do to workplace relations.
''The damage and conflict created will simply make it harder to rebuild the airline."
The 787 crew will lose their jobs just before Christmas and furloughed 777 crew lost their jobs back in July.
Savage said hundreds of crew opted for the company's furlough scheme where instead of collecting their redundancy payout they went on leave without pay in the hope that when flying restarted they might be able to return and regain some employment benefits.
"Because of the scale of the company's cuts some crew on furlough may now lose any hope of returning to work.''
Savage said E tū had proposed using extended leave without pay options and extending existing re-employment clauses as possible solutions but talks so far have not led to any agreement.
''Trust between cabin crew employees and Air New Zealand is at an all time low due to those 2013 attempts to decrease terms and conditions, and subsequent attempts to lessen crew working standards.''
When Covid hit, 787 crew were looking at possible strike action after protracted negotiations had failed to address their poor rates of pay.
"E tū crew will do what they can to find a solution but it may be the case that the furlough scheme for 787 crew does not survive the worsening global pandemic".
The airline today said today it had also decided to wind up a furlough arrangement in place with 550 international cabin crew. These job losses had been included in totals released earlier this year.
The airline's chief operating officer Carrie Hurihanganui said that the airline's international schedule remained largely limited by border restrictions.
''Unfortunately there is not enough flying to provide sustainable rosters for the number of international cabin crew we have.''
She said consultation with crew was now completed and the airline would be going ahead with the reduction of around 385 full time equivalent roles.
Due to the terms of two different collective contractual agreements for international widebody crew, in order to action those redundancies, it now has had to wind up a furlough arrangement with around 550 international cabin crew who finished working in the business in July.
''We are working closely with our unions to see if there is a different way we can provide these crew with a pathway back to Air New Zealand,'' said Hurihanganui.
Unions have been concerned about the airline sacking staff and using crew based in Shanghai.
She said the Shanghai crew base was contracted to Air New Zealand through Foreign Airlines Service Corporation (FASCO), which is a government agency in China.
''It is a requirement of the Chinese authorities that Chinese nationals are hired through this organisation. However, Air New Zealand considers and has always treated these crew as Air New Zealanders.''
None of the 58 Shanghai-based crew were currently operating after being furloughed in February.
Limited flights to Shanghai were currently being operated by New Zealand-based cabin crew."
Air New Zealand has cut close to 4400 jobs this year. Photo / Jason Oxenham
Air New Zealand reported an underlying loss of $87 million for the 2020 financial year, compared to earnings of $387m last year.
Covid-19 has wiped out its first-half result and statutory losses before taxation, which include $541m of other significant items, were $628m, compared to earnings of $382m last year.
The after-tax loss was $454m.
The airline has benefited from wage subsidy payments of $75m to the end of June and a further $40m since then. It has been paid $21m from the Government's freight subsidy scheme which runs to the end of the year and has supported more than 250 charters.
The International Air Transport Association says airlines can't slash costs fast enough to cover severe cash burn to avoid bankruptcies and preserve jobs next year.
Total industry revenues in 2021 are expected to be down 46 per cent compared to the 2019 figure of US$838 billion (NZ$1.2 trillion), the International Air Transport Association says.
This is a far more grim outlook than earlier in the year when it was calculated revenue would be down around 29 per cent compared to last year.
This was based on expectations for a demand recovery in the fourth quarter of this year but a resurgence of Covid-19 in second and third waves around the world has put the brakes on air travel.
The association expects full year 2020 traffic to be down 66 per cent compared to last year.
