View Full Version : SJ + Nz to go under 'ONE umbrella'

29th Jun 2005, 05:30
Wednesday June 29, 2005

Air New Zealand is planning to make radical changes to its short-haul operations in the Tasman and South Pacific markets to cut losses in a move that is expected to have an impact on Qantas's cost-cutting plans.

Over the next 18 months, the airline will integrate its ANZ brand and low-cost Freedom Air leisure carrier under one operational umbrella built around the latter's cost model, with the two airlines' A320 fleets placed on the same AOC "to gain efficiencies from a single fleet type." The move will not affect ANZ's regional and long-haul operations.

According to ANZ Group GM-Airlines Rob Fyfe, the carrier is aiming to reduce cost per seat by 10% so that the group can at least break even on the cutthroat Tasman and Pacific Island routes. With the entry of Emirates and Virgin Blue subsidiary Pacific Blue onto Tasman routes, "there has been a 25% decline in yield over the past two years on the Tasman," Fyfe told ATWOnline.

Key to the strategy are cost savings that will result from the fleet integration and new staff being employed on the lower-cost Freedom Air contracts. Fyfe dismissed notions that the move would result in industrial action and said the process will be gradual and apply only to new staff hired to meet expansion.

The move to cut costs was anticipated as ANZ battles the increase in capacity from Emirates and low-cost Pacific Blue and prepares for the onslaught of Jetstar on Tasman routes later this year. However, the move to lower costs sharply on ANZ-branded products, which will retain a business class, has serious ramifications for Qantas, which until now has kept its three distinctive products--Qantas, Australian Airlines and Jetstar--operationally separate. The three-airline strategy was a response to meet significantly different market needs while being restricted by legacy labor contracts.

Qantas CEO Geoff Dixon has warned his staffs of cuts in some areas and of the hiring of lower-cost international flight attendants to reduce costs in international operations. The ANZ move to deliver its premium brand, at least on Tasman services, with staff employed under low-cost airline contracts adds pressure for Qantas to act.

30th Jun 2005, 07:11
Yeah right... what does all this mean? The management resorting to its normal underhanded tactics we all know and hate... B scale for New Air NZ pilots/cabin crew etc. You better believe if it works on the 320 all other fleets will follow.

I mean.. How do the figure better buying power? If a seperate A320 entity can have better buying power than the whole of Air NZ then someone's head need to roll..
Better synergies? well they could always bring the whole show under the Air NZ unbrella for great synergies but hell no.. they couldn't leverage the unions that way..
Most Freedom contracts are souce through "deals" within Air NZ anyhow so the costs are still there.. just in another dept.
Hey.. they could always farm out the engineering to another company.. then I would predict a closer look as to why Air NZ engineering are suddenly losing maoney.. clever eh?
I don't know how Rob Fyfe thinks it won't start industrial action unless the unions stuff it up..... again.

30th Jun 2005, 23:39
Marvy, have you actually read the full press release or staff briefing from the company or are you just reacting to the snippet posted above?
If you have read the company release or contacted your union you would find that it is a discussion between the company and all affected unions. So therefore should the staff have objections concerns then the unions can voice this to the company. Obviously the company is unlikely to try and push this through if all the staff are going to go on strike. Seeing you have concerns you could ring Alpa or the Federation and let them know how you feel.
For that matter do you actually know what the Freedom contract is? The B scale might not seem that bad when you read it. BTW the B scale would only work for fleets already negotiated in the contract. So I think alarm bells would start ringing if Freedom management wanted to start putting in 767 777 and 747 pay rates into the freedom contract.

Happy flying dude.

1st Jul 2005, 00:06
"B" scale? That came in 1990 with the arrival of the s**b cab (744) ... You must be referring to a "C" scale.

Look out fellas (& fellessas, sorry) its divide & conquer all over again.