BUSINESS
MONDAY, 24 SEPTEMBER 2001
B U S I N E S S S T O R Y
Air NZ workers fearful over jobs
24 September 2001
By ANDREW MOFFAT and MATT CONWAY
Air New Zealand workers hold grave fears for their jobs, as efforts to avert statutory management nosedive.
The Press understands jittery staff have begun clearing out possessions from work in preparation for job losses, as big shareholders Singapore Airlines and Brierley Investments refuse to commit to a $300 million bail-out.
Airline Pilots' Association (ALPA) vice-president Paul Lyons said the plunging share price, the uncertain attitude of the big shareholders, and the depressed international market had members worried.
Air NZ shares are in free-fall. The airline's unrestricted B shares ended local trading on Friday down 4c at 26c, and A shares (NZ residents only) fell 2c to 29c.
"It's not a very pretty picture is it?" Mr Lyons said.
"I think you have your head in the clouds if you were not concerned about your job at this time. People are looking at it and applying their own logic."
ALPA had been fielding many calls from worried members, but staff were maintaining high standards, and keeping planes flying safely and efficiently, he said.
Air NZ spokeswoman Rosie Flay acknowledged that some staff may be feeling nervous about the airline's future, but scotched suggestions of redundancy fever.
"We haven't had that response at all from our staff," she said. "Individuals may be feeling that themselves. It's a natural thing, because there has been a lot of turbulence in the airline.
"But the message from the airline is one of encouragement, and continuing on as normal."
Engineering, Printing and Manufacturing Union national secretary Andrew Little said that although staff were worried, there was no need for panic. "My advice is for people just to carry on as normal."
The ultimate solution lay with the Government and the shareholders, and members were simply doing their best to keep the airline functioning, Mr Little said.
But the Government refuses to blink as Air NZ's financial position continues to haemorrhage, sticking to what appears to be an increasingly untenable bail-out deal while due diligence is completed. That could take weeks.
National deputy leader Bill English said: "The Government has days – not weeks – to sort it out. That's probably a view that the shareholders, and the bankers, are coming to as well."
Prime Minister Helen Clark and Minister of Finance Michael Cullen are refusing to be drawn into speculation on Air NZ's future.
A spokesperson for Dr Cullen said: "It's a bitch of a story for you guys, but it's a bigger bitch for us, and he (Dr Cullen) is not going to feed it."
Christchurch aviation analyst Les Bloxham said statutory management appeared to be the most likely scenario.
This would allow Air NZ to continue trading under the control of a manager, while debts and claims against the company were frozen.
If the board sought the appointment of a statutory manager, the request would first go to the Securities Commission, New Zealand's securities watchdog, which would then make a recommendation to the Government.
"That's very much on the cards from what I have heard," he said.
Mr Bloxham said he had fielded many calls in the aviation industry from employees and former employees of the national carrier.
"I feel so sorry for the staff, who have basically given their lives, only to see things fall down in rubble all around them," he said. "There's a lot of sad people out there."
The Government has stepped in to cover Air NZ against acts of war and terrorism with a $US2 billion ($4.9b) indemnity.
Aviation insurance underwriters have given notice to cancel the war risk cover of all international carriers after September 12's terrorist attacks in the United States.
Insurers are renewing policies on new terms to provide limited war risk cover only to airlines considered a good risk, including Air NZ. But the airline's cover of liability to third parties for injury and property damage arising from war or terrorist activity still stood to be slashed from $US2b to $US50 million.