Air New Zealand is making around 935 international cabin crew redundant as New Zealand’s border restrictions continue to take a toll on passenger demand.
The redundancies come at the same time an international industry lobby group has warned that airlines cannot slash enough costs to offset severe cash burn in order to avoid bankruptcies and preserve jobs next year.
Air New Zealand chief operating officer Carrie Hurihanganui said the airline reduced its schedule in September as a result of falling passenger demand on international routes.
It entered into consultation with its remaining international cabin crew around further staff reductions.
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That consultation was completed and the airline confirmed it would be going ahead with the reduction of around 385 roles.
At the same time it decided to wind up a furlough arrangement it had in place with around 550 international cabin crew who had not worked since July, resulting in them also being made redundant.
“Our international schedule remains largely limited by border restrictions and unfortunately there is not enough flying to provide sustainable rosters for the number of international cabin crew we have,” Hurihanganui said.
In order to action the 385 redundancies, it had to wind up the furlough arrangement due to the terms of two different collective contractual agreements for international widebody crew, she said.
“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.”
Around 4000 Air New Zealanders have lost their roles since the start of COVID-19 which includes the 550 international cabin crew on furlough, she said.
In June, Air New Zealand said its initial labour reductions of 4000 staff was expected to drive savings of $350 million to $400m a year. It also said reorganisation expenses had cost the company $140m to $160m.
In August, the airline posted a loss of $454m for the year ot June 30, the first time it has been in the red since 2002.
International Air Transport Association (IATA) chief executive Alexandre de Juniac said new analysis showed that the global airline industry could not slash costs sufficiently to neutralise severe cash burn to avoid bankruptcies and preserve jobs in 2021.
Recovery had been slower than predicted due to new Covid-19 outbreaks, and government mandated travel restrictions including border closings and quarantine measures.
Full year 2020 traffic was forecast to be down 66 per cent compared to 2019.
“The fourth quarter of 2020 will be extremely difficult and there is little indication the first half of 2021 will be significantly better, so long as borders remain closed and/or arrival quarantines remain in place.”
Total industry revenue in 2021 was expected to be down 46 per cent compared to US $838 billion (NZ$1262b) in 2019.
Meanwhile, Air New Zealand continues to hold onto 58 Chinese nationals who work out of its Shanghai crew base.
Hurihanganui said those staff were contracted to Air New Zealand through a government agency in China called Foreign Airlines Service Corporation.
It was a requirement of the Chinese authorities that Chinese nationals are hired through this organisation, she said.
“However, Air New Zealand considers and has always treated these crew as Air New Zealanders.”
None of its Shanghai-based crew have worked since February and are currently stood down on a furlough-type arrangement with FASCO.
Shanghai flights were currently being operated by New Zealand-based cabin crew.
In September E tū union head of aviation, Savage, said there was no operational reason for Air New Zealand to retain a crew base in Shanghai.
“The Shanghai base has always been about paying crew less and devaluing the role of cabin crew,” Savage said.
“Outsourcing is a barrier to raising standards in aviation and it needs to end.
“When the work comes back, it needs to come back to Auckland-based cabin crew,” he said at the time.