'We need to brace ourselves' - Air NZ CEO warns staff of more job cuts on the horizon

Air New Zealand could be making further job cuts on top of the 4000 redundancies its already made in the wake of Covid-19.

In a letter sent to staff today, the airline's chief executive Greg Foran announced the company's plan to get back on track, which he said would include removing $150 million from its wages bill.

Mr Foran details the company's plans to "survive", "revive" and "thrive". He says the airline will engage with staff and their unions as soon as possible.

"We are open to explore all options with unions that help meet our cost saving goals, but I do want to be clear that we need to brace ourselves for more discussions around leave without pay, reduced hours, job share, voluntary exits with redundancies as the last option."

The plan aims to take Air New Zealand through to its annual results announcement in late August 2022, with the revive phase expected to begin from September. 

"We have set the Annual Results announcement in late August 2022, which is in around 800 days’ time, as the target date for Air New Zealand to report we are starting to earn healthy profits again even though we may be only 70% of our pre-Covid-19 size."

Mr Foran says the airline is not expecting a return to long-haul flying of any note until next year. 

Despite the 4000 job cuts the airline has made to date, it is still projecting a financial loss for 2020. It was reporting a good start to the 2020 financial year, but as a result of Covid-19 market conditions deteriorated dramatically in early March.

The Covid-19 pandemic has already seen the airline move to save money in other areas, including reducing jobs by 30 per cent, which is expected to drive annualised savings of $350 to $400 million, according to its market update.

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Air New Zealand's executives also opted to take a 15 per cent pay reduction, as well as a hiring freeze.

It had also cancelled non-essential spending, a reduction in leasing costs and modification of various vendor and supplier terms.