Air NZ to Cut 15% Staff (Breaking News)

[Wirraway]

Tuesday October 14, 2:01 PM AEST
Air NZ/Reduce Staff: To Hold Briefing Wednesday

WELLINGTON (Dow Jones)--Air New Zealand said Tuesday it will cut 15% of its 10,000 person workforce over four years as part of a new strategic plan that aims to reduce annual costs by NZ$245 million.

Air New Zealand Chief Executive Ralph Norris said in a statement to the stock exchange the airline isn't yet revealing the specific elements of the new plan, adding they will be progressively revealed over the next few months.

The annual savings being targeted by the airline are expected to be achieved within four years, Norris said, with the savings to come from "all areas of operations, as Air New Zealand becomes more efficient and utilizes new technology."

The airline also anticipates a "significant lift" in revenue as it "moves to capture market opportunities," he said.

The airline will hold a briefing about the new strategic plan Wednesday.

-Wellington Bureau, Dow Jones Newswires; 64-4-471-5990; [email protected]

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NZPA

15 per cent of Air NZ jobs to go
14 October 2003

Fifteen-hundred Air New Zealand jobs will go under a business plan unveiled today.

The company, currently pursuing an alliance with Qantas, forecast annual savings of $245 million by 2007 under the plan.

Air NZ chief executive Ralph Norris said in a statement that the savings, along with increased revenue, would result from a new four-year business plan approved by the board today.

Although Mr Norris said the company would not announce details of the strategy, key savings would come from a targeted 15 per cent reduction of its 10,000-strong workforce by 2007.

"Rather than announcing the detail of the changes at this stage, to protect our competitive position we will reveal these details progressively over the coming months.

"Together they represent a fundamental repositioning of our business, and I am sure that they will keep Air New Zealand ahead of the wave of change moving through the industry," Mr Norris said.

The savings would come from all areas of operations through better efficiency and the introduction of new technology.

Most of the workforce reduction would come through attrition, as about 10 per cent of employees left a year, he said.

The strategic plan would integrate the new single class domestic and Tasman express services, self-check-in kiosks, and the purchase of new A320 aircraft, with a detailed re-engineering of the long-haul international business.

Air NZ has begun rebuilding itself in the last two years since narrowly avoiding bankruptcy with an $885 million government bail-out.

As well as cutting costs with its no-frills single class service on domestic and trans-Tasman routes, Air NZ is also pushing for an alliance with Qantas on the grounds that it would not be able to withstand intense competition from its bigger rival.

"The proposed Qantas strategic alliance is consistent with this strategy and remains an extremely important response to the competitive market and to the long term sustainability of Air New Zealand," Mr Norris said.

"The underlying dynamics of the aviation industry and the benefits that will flow from an alliance with Qantas remain unchanged."

Air NZ shares closed unchanged at 51c

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[Aussie Fo]

Ceo goes out to lunch. Couple of glasses of wine and thinks, 'Hmm share price isn't doing to well, i know i will say i'm going to sack 15% of workforce, therebysaving costs'. i'll worry about how i will do it in a couple of months. Problem solved

Reality is that all that happens iss that a couple of people are transferred to contract companies and therefor the compnay looses control of these people.

It is not difficult to reduce a workforce. to do it without effecting moral, or having a adverse effect on service/ on time deptures, is the art of a true manager

[Route Guide]

Reducing costs and staff are only two parts of a very complex formula. Ralph Norris indicates that the airline is positioning itself to get a return on the longhaul market. This after all is the majority of the airline's business, and one that is fundamental if it's to have a secure future. Recent product improvements and a real push to use new technology would tell me that this isn't an airline sitting fat dumb and happy while watching the changing airline market pass it by.

Ralph Norris looks to be a CEO that can take Air NZ places and this new plan (what ever it may be) may well be the vehicle.

Look for a new 300 seat aircraft and a new product to fit this important long haul market.

[crocodile redundee]

Fifteen percent!!!!! Chicken feed compared to the HUNDRED PERCENT out of work when these turkeys finished their foray into Ansett a few years ago. Its a sad day !!!!!!!!:confused:

[UpperDeckRight]

Geez, Air NZs management are already starting to sound like QF management ;)

[Wirraway]

Wed "New Zealand Herald"

1500 jobs to go in Air NZ's big trim
15.10.2003
By CHRIS DANIELS and MARTIN JOHNSTON

Air New Zealand will cut 1500 jobs in a cost-cutting scheme aimed at saving $245 million a year.

The job losses may include about 300 compulsory redundancies.

The airline's four-year business strategy, announced yesterday, also shakes up the airline's management - taking chief operating officer Andrew Miller as its highest-ranking casualty - and promises benefits for passengers.

Chief executive Ralph Norris said savings would come from all areas as the airline became more efficient and used new technology.

But the job losses would be mainly in the corporate and administrative areas, rather than in the "front office", which included pilots and cabin crew.

"Engineering operations will not be affected by this," he said.

Air New Zealand's 10,000-strong workforce will be cut by 15 per cent over the next four years.

The majority of the staff losses will come through attrition. At least 10 per cent of employees resign or retire each year.

Around the world, airlines have sacked thousands of workers as they struggle to survive, especially after the terrorist atrocities in the United States two years ago.

Mr Norris said last night: "The board and I are committed to ensuring that there are minimal redundancies over the next four years.

"A figure of around 300 would possibly be close to the mark, but it may be that there are no redundancies."

Since being bailed out by the Government last year when it was facing bankruptcy, Air NZ has brought itself back from the brink.

Last financial year it made a profit of $220 million.

Mr Norris and airline management have consistently said this return is too small, as aviation profits can quickly swing to losses.

Yesterday, Mr Norris said greater use would be made of computer technology, including electronic ticketing and electronic data transfers between airlines.

"Also, we have a lot of complicated processes that have built up in the business over the years.

"We are endeavouring to improve passenger experience by making check-in processes quicker and simpler."

Other changes included improved internet booking, improved frequency of flights, faster boarding, better border processing on international flights, "better recognition of loyalty" and new in-flight offerings.

New staff uniforms are also being introduced.

Mr Norris is known in the business community from his previous job as chief executive of ASB Bank as a keen advocate of using technology to make businesses cheaper and simpler to run.

Engineering, Printing and Manufacturing Union national secretary Andrew Little said yesterday that the union's 2500 Air New Zealand members - who include clerical staff - would be trying to reconcile the job cuts with the two-year wage freeze they had accepted for the good of the company.

"I think a lot of people are going to feel somewhat betrayed by this.

"There will inevitably be some compulsory redundancies. My hunch is that it will be quite a significant number."

The airline's new management structure introduces less grand and complicated titles.

Mr Miller left after his chief operating officer job was scrapped and he did not win a new one.

He was appointed in May last year and was viewed as the second in command and successor to Mr Norris.

But Craig Sinclair, the former chief executive of the state-owned enterprise Airways, joined Air NZ as its technical and operations vice-president in September last year.

Last week, he described himself as the deputy chief executive while giving evidence for the airline at an Employment Court hearing into company plans for staff drug and alcohol testing.

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[flyboy-nz]

but what you do need to understand is that only a small fraction , up to 400 will be lost through redundencies ( 1ZB ) - the rest is simply based on there number of staff turnover and the decision to cut down the amount of people they will hire to refill those positions over the next 4 years.

Its not all bad news , but I am wondering where they will stop with these cut backs to try and save money.

[ferris]

the decision to cut down the amount of people they will hire to refill those positions over the next 4 years.
What an interesting statement. How do you refill positions without hiring?

Don't be fooled by the management speak. I would hazard a guess and say that the 'natural staff turnover' would be mostly the 'frontline' staff (pilots/FAs/engineers), the people they can't afford to lose.

There will be slashing and burning.

[somyungi]

I dont think so, this would never have happened if air NZ didn't buy the lemon that was Ansett, which they only ever did in order to fly the Aus domestic routes, all because the Aus goverment wouldn't reciprocate the trans tasman open skies agreement.

Looking for some one to blame, write a letter to your local Aus MP.

[splatgothebugs]

Somyungi, I wouldn't touch that one with a 10 foot (or maybe 50ft) Barg pole.

There is some very angry people who read these threads and are going to jump all over that statement ;)

Has anybody thoght that this whole 15% stuff is just for the media and fair trde watch dogs.

Could Ralph be pulling a rug over their eyes to help the ANZ, QF deal go through. :confused:

[currawong]

Could be they just got the results back from the first round of drug tests....

[flyboy-nz]

that thought did cross my mind .. ;)

[PBR Streetgang]

Somyungi

You obviously only read NZ newspapers of the 'A Dingo Stole Our Airline Variety'. ********!:mad:

[Gnadenburg]

Come on somyongi.

If AirNZ was "forced" into buying the lemon Ansett, why did they veto the sale of Newscorp's 50% to Singapore? But I do agree, if it wasn't a lemon then, it sure became one wholly owned by NewZealand.

As far as open skies goes, and we will have to wait for the release of Cabinet papers in a few years, my understanding is AirNZ was not intending to operate in the spirit of the agreement. IE: Was only capable of flying ad hoc services with 767s up and down trunk routes as opposed to serious investment in a domestic operation.

The veto a myth. There were alternatives to the above limited option. But AirNZ didn't have the expertise, fortitude or capital raising capability to go it alone-and so they bought into Ansett.

[Tape It Shut]

You could walk through Air New Zealand and find more than 15% of the people sitting around doing nothing, or perhaps sending joke e-mails etc. The place is a total cradle to grave institution with plenty of dead wood.

Norris will find out that like all the other Air NZ staff cuts in the past that the 15% that leave tend to be the very people you want to keep. The more motivated and therefore easily employed elsewhere.

Air NZ is full of people that have taken redundancy and then been rehired several years later. This staff cut methodology is old and tired. The dead wood hangs in and the good people shoot through.

What Air NZ needs is more efficiency from its workers and that is a big ask given the institutional background of the airline.

[Austin Holed]

I agree with you to some extent Tape-It-shut although as a former employee of Air NZ I can say with certainty that there is plenty of efficiency. However, it is all at the coal face. The flight crews, the ground staff, the engineers - they all work a heck of a lot harder than most people realise. The deadwood? That's in the corporate tower, this is the area that needs culling and I believe that this is where Norris has his sights aimed. eg, Goodbye Andrew Miller.

As far as the comments on the Ansett purchase and subsequent demise...I think the best way to apporach this particular topic is to just back away slowly, keep your hands where I can see them, breathe slowly, that's it easy, easy....:sad:

[kiwipilot02]

I agree with Tape It Shut I would start by cutting out issuing leather bound satchels( Koru embossed) @$180 each to the check in chicks they use just to carry their lunch to work in and chop out travel allowance to pre 1991 employees paid at certain airports. Both a waste of money.The airline does have a lot of previously made redundant people back working for them as they dont't have to retrain them.

[BOGAN]

I just hope that out of all this money saving they have planned for Air NZ, they realise that paying thousands of dollars in legal fees to prove someone who isn`t even in the airline industry that we need drug and alcohol tests isn`t going to help the cause.

It don`t make sense.

Correct me if I am wrong.

[sirjfp]

Only one place Air Sheep Shagger deserves to go and that is down the toilet. The sooner the better .

[splatgothebugs]

SIRJFP, it's dumb ass comments like yours that make everybody realise that there are still idiots in the industry. Grow up and get a life it's not going to happen :*

[Austin Holed]

sirjfp, I've spent nearly 40 years in new Zealand, both in cities & rural areas. Now, maybe I have led a sheltered life but I have never actually seen anyone shag a sheep. In the interests of enhancing trans-Tasman relations could you please explain why some Australians have this fanatical fetish about sheep-shagging? I am sure any Kiwis who peruse this site would just love to hear a dinkum Ocker such as yourself explain this curious national trait.

All the best and please pass on my regards to that fine looking animal Skippy. Now there is a bush kangaroo with a hot bod.;)

Meanwhile, back on the actual topic.........

[splatgothebugs]

I don't know AUSTIN I still have my velcro gloves for the sheep @ home.:p

I would be very keen to hear of some figures from anybody about actual staff atrition rates and from which sectors they come.
I can't imagine how any company can just make 1500 jobs become unavalible, like I said earlier maybe it's just a stunt for the commerce commission.:confused:

[Australia2]

Only 85% to go.

[nike]

sirjfp, Australia2 - you are the embodiment of satirical martyrdom.

The comments that you and yours continue to make with reference to the part played by AirNZ in the demise of Ansett have no relevance anymore.

My feelings of sorrow for those individuals affected, and of anger towards those responsible have slowly been eroded by the continual bland, obtuse and snide remarks made in what I believe are the wrong discussion topics to express such views.

Please feel free to open another Ansett thread and dribble on to your hearts content. Alternatively, push off. I for one have had more than my fill of worthless jibes.

[Tape It Shut]

People may not shag sheep, but a while ago some people were arrested in Nelson for having their way with a goat, as well as a woman on the West Coast shagging an Alsatian.

So I think people are naive to suggest there are no sheep shaggers lurking around NZ.

[Austin Holed]

You think that's bad, I once had sex with an Australian woman.;)

meanwhile back on the actual topic......

[Major Minor]

Austin, only the once?

Obviously this woman realised that you were a Kiwi and as such ran away laughing!:D

[longjohn]

I think perhaps some of the Air NZ guys need to show a little sympathy and 'turn the other cheek'.

Comments to the tune of 'get over it' simply incite more loathe and despising.

I do not beleive any former Ansett employee would genuinely wish Air NZ employees to meet a similar fate, however at the same time please appreciate that the very fact that Air NZ continues to exist and perhaps even thrive does stick in some of our sides like a painful thorn.

I would like to think that most ex AN people conduct themselves better than some ex 89'ers when the subject of their tumultuos past is raised, however it is not 14 years since Air NZ unceremoniously dumped us onto the scrapheap.

Whilst I can appreciate that it is natural to defend attacks against your livelihood, as I have said before many times, I am stunned by the calous level of disregard held by many at Air NZ to the plight of their former 'brothers'.

How many former Ansett employees do Air NZ employ? I wager it would be less than a quarter of that picked up by Virgin Blue or Qantas.

What kind of assistance did the Air NZ staff offer their former brothers?

What did the NZ CTU do to assist the AN workers?

These answers to these questions perhaps illucidate why so many ex Ansett people are still pissed.

My advice, grin and bear it, ignore the comments and eventually 'we' WILL get over it. If you bite (by presenting yourself as a target) expect more vitriole.

[Austin Holed]

A good post longjohn, it is reasoned unemotional comment such as this that helps both sides of the fence come to a better understanding.

I was an Air NZ employee at the time that Ansett ceased operations and I and many others were shocked by this terrible and for us lowly workers, unexpected event. Naturally we all thought of what this would be like if we were in the same situation (and we very nearly were). Then the anti-Kiwi, anti-Air NZ backlash started. We copped it from AN staff, the illustrious Aussie media and also your inspiring politicians. Some incidents that I was personally aware of were crews verbally abused and spat at in SYD and crew catering in MEL was soiled with rubbish. Petty acts by a minority I am sure, but these sort of things race around the network faster than the speed of light and sympathy evaporated at the same pace.

I am not justifying the lack of support, just trying to explain it. For a long time on this forum, the slightest mention of Air NZ would bring down a rain of abuse and multiple tirades against us all. This further enhanced our lack of empathy. I am not saying that things would be any different if the situation was reversed, but it was certainly hard to have charitable thoughts amidst all the ranting & raving.

I could go on for pages, writing about AN's previous owners, it's own Aussie managers, Air NZ's inept managers, the list is never ending. The blame is spread far & wide, you can even drag in Osama bin Laden as a conspirator but at the end of the day, it has happened, the past can not be changed. If it is any consolation I wince when I read "get over it" too. It's not what I want to say and I certainly understand that it is not what you want to hear.

On a lighter note, Major Minor, she ran away alright, but I am not sure if she was laughing or not, she definitely had tears coming out of her eyes. Whether it was due to pain or amusement, only she knows. :\

[Australia2]

Longjohn and Austin,

Two great posts, maybe the Anzac spirit is nor dead after-all.

[SydGirl]

Nicely said longjohn and Austin Holed. I for one appreciate your well thought out, rational and civilised comments.

There will always be anger and bitterness (on both sides), however it is time to move forward, and not continue to dwell on mistakes made past.

SG
:)

[nike]

Comments to the tune of 'get over it' simply incite more loathe and despising.
AS OPPOSED TO:
Only 85% to go.
Only one place Air Sheep Shagger deserves to go and that is down the toilet. The sooner the better .
I think perhaps some of the Air NZ guys need to show a little sympathy and 'turn the other cheek'.
Which alternatively promotes harmony and a rekindling of what was such a STRONG brotherhood?
My advice, grin and bear it, ignore the comments and eventually 'we' WILL get over it. If you bite (by presenting yourself as a target) expect more vitriole.
OH, OK. So put up with blatant destructive comments and DO NOT respond under threat of further reprimand.

Some sound advise. So unbiased and clear.
however it is time to move forward, and not continue to dwell on mistakes made past.

Australia2,
Two great posts, maybe the Anzac spirit is nor dead after-all.
Only 85% to go.
Well, which is it? I do not understand you at all. Firstly you wish for all the AirNZ staff to lose their jobs, the entire lot, every last person working to provide for their families must no longer be employed. AND then in the next breathe you are hoping for a continuation of friendly trans-tasman relationship.:confused:

I am dissappointed in your desire, your need to see more people with disrupted lives. People who have done little more than to try a make a living.

SHAME on you.

Yes I am upset. But why shouldn't I be? I am sick of one-sided abusive remarks where NZer's are bullied into refraining from defending themselves.

[Australia2]

Nike,

It was nice to read the post of Austin Holed with the first compassionate comment I have ever been aware of from the eastern tasman. Hence a little faith in the trans-tasman relations. Longjohns great post will hopefully shed further light on the "other perspective to yours"

I personally had only 2 encounter's with ANZ crew at the time, but perceived on both encounters a complete disregard for the welfare of the AN staff who, in our eyes were left out to dry by ANZ managment.

Many, many factors led to our demise, although I think it is accepted by all ANZ were a significant component. Being the straw that r**ted the camel in the end, I guess they were always going to be prominent when the blame police started their search.

If my original post offended you, as ANZ staff it was un-intended; having been through the entire nightmare I would never, ever wish similar difficulties on other hard-working staff. I would however not shed a tear if 100% of the board/management responsible were to find themselves looking for new employment. Their arrogance at the time was incredible, with an almost inability to acknowledge any part in the events.

Life must, and is going on, I won't dwell on this forever. In time memories will fade although maybe the feelings involved can only be understood by those who have experienced similar. I dont think the blood letting in pacific aviation is over by a longshot, but restate I would never wish the frustration and (if temporary) despair on another professional colleague.

[Austin Holed]

"I would however not shed a tear if 100% of the board/management responsible were to find themselves looking for new employment"

Well if there's only one thing both sides of the Tasman ever agree on, the above quote would have to be it.

[nike]

Australia2,

I thank you for your reply. I appreciate that you now see that your first post was upsetting to me.

I wish to say that I did not intend to portray the "get over it" attitude in any of my posts. In re-reading it I can see how said distinction can be interpreted and therefore do apologise for not ensuring that such sentiment was absent.

My reaction was purely to what I see as poorly directed frustration, which in this case I totally understand but often condemn because such comments are often either hastily constructed and therefore easily misinterpreted or simply wide of the mark.

Please do not read 'the PC police" into that last statement, more over simply remember one only has the words on a screen with which to converse and therefore some thought needs to be put into each post.

As for an apparent lack of compassion from this side of the ditch, I for one was deeply saddened by the closure of Ansett, but you are right in as such as I have never portrayed this openly. As to why I am not sure, maybe there was a feeling of guilty by association and that any attempt at humility would be ill-received? Maybe a lesson in human relations is overdue? Either way poor form on my part.

I can only suggest to not interpret the lack of any SIGN of compassion for a lack of compassion.