Air NZ CEO can't rule out job cuts if lockdown extended

Hundreds of thousands of people were jetting around New Zealand and to Rarotonga – far more than pre-pandemic times – and then the latest lockdown hit and flights came to a shuddering halt.

And while Air New Zealand recently rehired 700 staff members, if the country faces an extended lockdown, some of those could once again find themselves out of a job.

The airline released its financial results today, posting a $440 million loss  to the end of June, before other significant items and taxation.

That’s its first full year of operation under international travel restrictions.

Greg Foran says the company is in talks with the Government about its capital structure.

Chief executive Greg Foran told 1 NEWS the results were fully expected.

“We flew a few less passengers and did a lot more cargo,” he said.

The bright side is their cargo operation, which is up 70 per cent on the past year, helped by Government subsidies and airfreight support schemes.

The latest lockdown – however long it may be – means the airline will have to yet again tap into the $1.5 billion Government loan.

It’s so far drawn $350 million of it.

“Well over a billion dollars of that left, which is good, it gives us surety of operation and some time to sort out when we can get on and do a capital raise,” Foran said.

It’s being assessed monthly, looking at forecasts for domestic, trans-Tasman and Cook Islands travel.

“We will certainly be tapping into it, and again, not unexpected when you consider just seven flights operating today.

“We were doing $6 billion dollars, we’ve now got a business that did $1.5 billion of moving passengers, and nearly all of that was domestic. The domestic business was going gangbusters, in fact July was our best July ever.”

July saw the airline running at 130 per cent of its usual capacity.

Today, there are just seven flights.

“And that’s part of what we need to do to keep the country going and get essential workers around.

"They are just to main ports, Auckland, Wellington, Christchurch, Nelson and we’re looking forward to getting back to level two and we can get more flights back on.”

There are still international flights, mainly MIQ routes to get Kiwis home.

Since the pandemic began, 70,000 Kiwis have come home on Air NZ flights.

Vaccinations are going to be critical, Foran insists. About 82 per cent of the airline’s frontline staff have been fully vaccinated.

“We’re doing everything we can to encourage that number to go up, because I think that’s absolutely critical, not just for Air NZ but for New Zealanders.”

And as for those workers, after those massive job cuts last year, 700 were re-employed this year, as the trans-Tasman bubble opened and Cook Islands flights became increasingly popular. That included crews, pilots and airport workers.

“We’ll hold on to those people and see how it plays out over the next few weeks. If it goes on for longer, we’ll have to look at other opportunities to save some money.”

He said it was far too early to contemplate more job losses at this stage, saying the management team is looking at all options, such as people taking leave without pay.

“It’s such a difficult situation, here we are 570 days since we pulled our flights out of Shanghai, and here we are again in [Alert] Level 4 lockdown, difficult to predict.

"But, I am confident about the resilience of Air NZ to get through whatever comes our way, and secondly the desire of New Zealanders to get out there and travel. And I’m pretty confident we’ll be back stronger and better than we ever were.”