11 May 2020

Air NZ internal documents reveal long, slow recovery

From Checkpoint, 5:45 pm on 11 May 2020

Internal Air New Zealand documents predict it will be two years before the airline can hope to be back at 70 percent of its pre-Covid-19 long haul business.

The airline is flying just 5 percent of its usual international schedule and is in the process of laying off 950 full-time cabin crew across its Boeing 787 and Boeing 777 fleets.

It has already cut 300 pilot jobs, despite collecting more than $70 million in wage subsidies and being granted a $900 million government loan.

A day in May 2019 would have seen the airline using 1500 of its 3000 cabin crew to operate its daily services. Now in May 2020, it is using 150 on wide-body planes and just 53 on narrow body or single-aisle planes used on domestic routes.

In a redundancy briefing document to workers the company said the global pandemic has decimated the aviation industry, with Air New Zealand operating at just five percent of its normal international capacity, and it will not be scaling up for a long time.

"We are now seeing the real likelihood we will be a much smaller airline of the foreseeable future, and that the recovery will be a lot longer and slower than previously anticipated," the document said.

One year from now Air New Zealand expects to be 30 percent smaller, and it is unlikely to see an improvement in revenue in 2020, the company said.

Redundancy briefing papers to staff show Air New Zealand is considering a union proposal to cut cabin crews' daily rate by seven percent, the equivalent of reducing fortnightly pay by a day.

It has already been revealed that 300 pilots are losing their jobs and the 900 still employed will take a 30 percent pay cut for the next nine months. 

Air New Zealand has asked cabin crew willing to take at leave without pay to come forward, but that leave has to be taken in not-negotiable blocks of 12 or 18 months.

The rehire process for furloughed crews is still being worked out. 

The airline has rejected a call for it to promise it will not outsource contracts for cabin crew on 787s for six years. 

"A guarantee on anything at the moment is just not possible. We are committing to jobs for our cabin crew by offering leave without pay, we are also committed to supporting our redundant cabin crew to return to Air New Zealand through the rehire process," the company said in a statement.

A grid of redundancies in the company documents is dominated by departures. All 98 flight service managers and 78 inflight service coordinators are going. 

All 367 premium service flight attendants gone, and all 316 pacific class flight attendants  crew gone, along with significant reductions across other cabin crew roles.

One positive for the company is Air New Zealand has secured a freight contract - a six-week cargo charter. It means 10 flight service managers and 190 other cabin crew will get a reprieve for the duration of the contract.