Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

Air NZ pilot redundancies

Old 28th Apr 2020, 21:36
  #281 (permalink)  
 
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The training department have been told that the down training will take 38 rosters and realistically those who are needed on the Bus will be down trained and everyone else will just be allowed to become un-current and paid to sit at home with no work. This is a financial disaster for Air NZ and will lead to more job losses. Air NZ have just been on the morning news saying they now expect their domestic network to only be 50% until all travel and border restrictions are lifted.
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Old 28th Apr 2020, 22:00
  #282 (permalink)  
 
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Originally Posted by Ollie Onion View Post
The training department have been told that the down training will take 38 rosters and realistically those who are needed on the Bus will be down trained and everyone else will just be allowed to become un-current and paid to sit at home with no work. This is a financial disaster for Air NZ and will lead to more job losses. Air NZ have just been on the morning news saying they now expect their domestic network to only be 50% until all travel and border restrictions are lifted.
I'm not so sure it'll lead to more Job losses.

As I said above, Wages and Fuel make up approx $2.6B of the $4.6B Annual expenses. Fuel is obviously way down and wages are dropping with redundancies. There's another $2B of expenses there which will need addressing.
Jet Pilot wages have probably reduced from ~$230M to ~$175M after Redundancies and the 14% Paycut.

If they make another 200 Pilots redundant, that could reduce the wage bill by another ~$25M, but also risks the remaining Pilots voting against extending the 14% cut beyond 9 rosters. It would also ground the Airbus fleet and require even more down-training.... $25M will not save Air NZ.

I expect we'll be asked to take a larger % Paycut before they make more Pilots Redundant.That's the only solution that keeps Pilots in their current seats, removing the need to re-shuffle everyone, and the only way to reduce the costs of the higher paid Pilots who are protected from Redundancy by Seniority.
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Old 28th Apr 2020, 22:43
  #283 (permalink)  
 
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Originally Posted by Ollie Onion View Post
The training department have been told that the down training will take 38 rosters and realistically those who are needed on the Bus will be down trained and everyone else will just be allowed to become un-current and paid to sit at home with no work. This is a financial disaster for Air NZ and will lead to more job losses. Air NZ have just been on the morning news saying they now expect their domestic network to only be 50% until all travel and border restrictions are lifted.
Welcome to the downside of seniority.

Air NZ should be going to the courts with the argument its not financially viable.

It's unfortunate they can't just leave you stood down like here in OZ.
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Old 28th Apr 2020, 23:03
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Originally Posted by normanton View Post
Welcome to the downside of seniority.

Air NZ should be going to the courts with the argument its not financially viable.

It's unfortunate they can't just leave you stood down like here in OZ.
That would cost more.
Redundancy for a junior SO/F20 is ~$20- $30k
Redundancy for a 777 Captain is closer to $400k... more when you payout their accrued & long service leave.
Plus Court costs.
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Old 28th Apr 2020, 23:12
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Originally Posted by ElZilcho View Post
That would cost more.
Redundancy for a junior SO/F20 is ~$20- $30k
Redundancy for a 777 Captain is closer to $400k... more when you payout their accrued & long service leave.
Plus Court costs.
Well that's my point. Don't forget that one training movement at the top can make countless more down the line. Training costs, sim costs, allowances etc. it all adds up.

The most cost effective way here is an option that allows the company to stand people down. Not an option in your current EBA, but again, with the survival of the company at priority #1, Air NZ should be going to the courts.
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Old 28th Apr 2020, 23:48
  #286 (permalink)  
 
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Originally Posted by normanton View Post
Well that's my point. Don't forget that one training movement at the top can make countless more down the line. Training costs, sim costs, allowances etc. it all adds up.

The most cost effective way here is an option that allows the company to stand people down. Not an option in your current EBA, but again, with the survival of the company at priority #1, Air NZ should be going to the courts.
Is it legal to force LWOP in New Zealand? I suspect it isn't but haven't found good information on it.
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Old 29th Apr 2020, 00:00
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Well Jetconnect and Jetstar NZ are all on LWOP.
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Old 29th Apr 2020, 00:00
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Originally Posted by normanton View Post
Well that's my point. Don't forget that one training movement at the top can make countless more down the line. Training costs, sim costs, allowances etc. it all adds up.

The most cost effective way here is an option that allows the company to stand people down. Not an option in your current EBA, but again, with the survival of the company at priority #1, Air NZ should be going to the courts.
Air NZ rejected 40+ 777 Captains offer of Voluntary severance, which, unlike Redundancy, could of been paid fortnightly. I'm just a simple line Pilot, but seems they aren't interested in losing people off the top (thus reducing down-training) unless they take early Retirement and walk. I don't believe down-training will cost any "cash" while we're sitting at home with nothing else to do.

Again, the Jet Pilot wage bill will have reduced from ~$230M to ~$175M out of the total $4.5B in expenses. Standing us down (which isn't legal in NZ) would buy them enough cash for maybe another 2 months.
I have no doubt if COVID drags on we'll be asked to make to accept further paycuts, and I would expect the Executive to lead by example.

Originally Posted by dctPub View Post
Well Jetconnect and Jetstar NZ are all on LWOP.
I believe they were told to accept LWOP or face closure of the NZ operations, thus Redundancy.
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Old 29th Apr 2020, 04:50
  #289 (permalink)  
 
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Originally Posted by ElZilcho View Post
I believe they were told to accept LWOP or face closure of the NZ operations, thus Redundancy.
Well not exactly. Qantas decided very early on that as a group they basically need to shut down to preserve cash. 20000 people were stood down without pay with the idea of not making anyone redundant and having everyone return to work when the crisis is over and things lift.

In NZ obviously the labour laws are a little different and a stand down was not possible in the same way as oz so a temporary amendment to the cea was required and voted in very quickly without fuss from the staff.

Air NZ is an absolute mess. I'm surprised they didn't do the same thing, early on, just shut down and not pay people rediculous amounts to sit around and do nothing. It must be costing them millions.
There's been no threat or talk of redundancies at qf, in oz or NZ, and everyones doing their bit and making the sacrifices in order to preserve the company and jobs.

If there's work to be done then people are stood up to do it and paid accordingly, as are those vital to keeping the company going.

Since then Australia has introduced the jobkeeper subsidy and NZ has the wage subsidy which every one who was stood down without pay are receiving the basic subsidy from their governments

​​
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Old 29th Apr 2020, 05:12
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Again, the Jet Pilot wage bill will have reduced from ~$230M to ~$175M out of the total $4.5B in expenses. Standing us down (which isn't legal in NZ) would buy them enough cash for maybe another 2 months.
On those numbers it's almost hard to believe it's worth the hassle of down training. Have the guys needed fly, those that dont sit at home and get paid.
It's not a long term solution, but as elzicho mentions, it not going to make or break the survival of the company in the short term. I suspect they have bigger fish to fry than pilot efficiencies.
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Old 29th Apr 2020, 05:17
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Air NZ not interested in keeping staff long term.
Wouldn't be surprised if the staff reduction is permanent. Apparently Foran thought the airline was 20% bigger than it should be in his vision when he joined the airline.
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Old 29th Apr 2020, 05:33
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Originally Posted by Lepper Messiah View Post
Well not exactly. Qantas decided very early on that as a group they basically need to shut down to preserve cash. 20000 people were stood down without pay with the idea of not making anyone redundant and having everyone return to work when the crisis is over and things lift.

In NZ obviously the labour laws are a little different and a stand down was not possible in the same way as oz so a temporary amendment to the cea was required and voted in very quickly without fuss from the staff.

Air NZ is an absolute mess. I'm surprised they didn't do the same thing, early on, just shut down and not pay people rediculous amounts to sit around and do nothing. It must be costing them millions.
There's been no threat or talk of redundancies at qf, in oz or NZ, and everyones doing their bit and making the sacrifices in order to preserve the company and jobs.

If there's work to be done then people are stood up to do it and paid accordingly, as are those vital to keeping the company going.

Since then Australia has introduced the jobkeeper subsidy and NZ has the wage subsidy which every one who was stood down without pay are receiving the basic subsidy from their governments

​​
Having worked for the QF group on this side of the ditch, I think I can safely say all those involved were well aware of what the outcome would be if they didn't agree to being stood down, even if it wasn't explicitly stated.
QANTAS would also be in the exact same situation as Air NZ if not for the different employment Laws around standing people down. Everyone's "doing their bit" because they weren't given a choice. I doubt those 20,000 would of voluntarily taken LWOP after being locked out by AJ back in 2011.

The Australian Wage subsidy is also worth about twice what the NZ one is.

Originally Posted by dctPub View Post
Air NZ not interested in keeping staff long term.
Wouldn't be surprised if the staff reduction is permanent. Apparently Foran thought the airline was 20% bigger than it should be in his vision when he joined the airline.
Probably right. Even after Redundancies we still have more Pilots than 5-6 years ago.
Redundant Pilots will likely be called back to cover attrition (~30 per year) and possibly a bit of "cautious growth" in the years after COVID.

Based on the CEA Redundancy clauses though, they could of justified making 700 of us redundant. (less than 60 hrs average for 3 consecutive rosters)
I'd say they are interested in keeping *most* staff for the long term.
Redundancies seem to be based around reverting Luxons expansion and consolidating routes to the money makers once the border re-open.

Last edited by ElZilcho; 29th Apr 2020 at 05:45.
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Old 29th Apr 2020, 06:56
  #293 (permalink)  
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Originally Posted by dctPub View Post
Air NZ not interested in keeping staff long term.
Wouldn't be surprised if the staff reduction is permanent. Apparently Foran thought the airline was 20% bigger than it should be in his vision when he joined the airline.
The latter bit is a really interesting statement. I have often thought that the bods in route planning have made some 'interesting' decisions. For example, who thought Buenos Aires was a good idea, especially when there was a competition to the same region via Latam? NZ has had an influx of people from India; would it not have been better to tap that market with a direct route. Were all the US routes making money (thinking Chicago, Houston, etc)?
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Old 29th Apr 2020, 07:57
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US routes were doing better than expected apparently.
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Old 29th Apr 2020, 16:31
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Originally Posted by ElZilcho View Post
I'm not so sure it'll lead to more Job losses.

As I said above, Wages and Fuel make up approx $2.6B of the $4.6B Annual expenses. Fuel is obviously way down and wages are dropping with redundancies. There's another $2B of expenses there which will need addressing.
Jet Pilot wages have probably reduced from ~$230M to ~$175M after Redundancies and the 14% Paycut.

If they make another 200 Pilots redundant, that could reduce the wage bill by another ~$25M, but also risks the remaining Pilots voting against extending the 14% cut beyond 9 rosters. It would also ground the Airbus fleet and require even more down-training.... $25M will not save Air NZ.

I expect we'll be asked to take a larger % Paycut before they make more Pilots Redundant.That's the only solution that keeps Pilots in their current seats, removing the need to re-shuffle everyone, and the only way to reduce the costs of the higher paid Pilots who are protected from Redundancy by Seniority.
Fuel *won't* be way doiwn - it'll be exactly where it was when the beancounters hedged it, which is a few (or more...) degrees north of today's spot prices
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Old 29th Apr 2020, 18:43
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Originally Posted by RevMan2 View Post
Fuel *won't* be way doiwn - it'll be exactly where it was when the beancounters hedged it, which is a few (or more...) degrees north of today's spot prices
Yes, fuel was hedged, how much and at what rate I'm not sure. However I wasn't referring to the cost per tonne, but the fact that 95% of the fleets grounded thus we aren't burning $1.3B this FY.
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Old 30th Apr 2020, 02:32
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Originally Posted by Anti Skid On View Post
The latter bit is a really interesting statement. I have often thought that the bods in route planning have made some 'interesting' decisions. For example, who thought Buenos Aires was a good idea, especially when there was a competition to the same region via Latam? NZ has had an influx of people from India; would it not have been better to tap that market with a direct route. Were all the US routes making money (thinking Chicago, Houston, etc)?
Anti Skid On They talked about this last year on a Pilot Expo Day. They looked at India closely, particularly with the demand. But the issue is around the aircraft that would have to be operated on the route, as those from India are notoriously price conscious (read: do not fly in premium).

For example (let's call premium = Premium Economy, Business or First Class).
Air India B773 has just 39 premium seats. Economy seating of 303 pax.
Air NZ B773 98 premium seats (over 2.5 times the number). Leaving space for only two economy cabins seating 244 pax.
Jet Airways (Indian-based carrier that has folded) had similar; 38 premium to 308 economy.

Boeing 747-400 comparison
Air India B744 has just 38 premium seats, with 385 economy
Air NZ B744 (retired) had 85 premium seats, to 294 economy.

The comparisons get even more start when you compare an Air India 788 vs Air NZ 789 (apples and oranges I know). But:
Air India has just 18 premium seats. Fitting in 238 economy.
Air NZ has 60 premium seats (almost 4 times the number). Only leaving space for 215 economy seats, despite the -9 being over 6m longer (approx. seven rows of seats).

So I've been told it's the balance. Finding a route that (particularly on ULR) is a very business traveller heavy market, but will also appeal to economy pax. Considering that Business Class is where the money is made... It's crucial that this is full. And Buenos Aires obviously ticked the business traveller market box. And India does not.

We do not operate the right config for Indian flights and probably never will.
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Old 30th Apr 2020, 11:06
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Looks like Winnie is threatening to shake up Air NZ: Stuff Article. Unfortunately it's going to be too little too late for those drivers shortly to be made redundant. Maybe one of the first questions the nationalised owner will ask is why didn't they accept those voluntary severances from those pilots on the big bucks? They're going to pay them to sit around for 54 weeks anyway...
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Old 30th Apr 2020, 19:40
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Originally Posted by PRD Area View Post
Looks like Winnie is threatening to shake up Air NZ: Stuff Article. Unfortunately it's going to be too little too late for those drivers shortly to be made redundant. Maybe one of the first questions the nationalised owner will ask is why didn't they accept those voluntary severances from those pilots on the big bucks? They're going to pay them to sit around for 54 weeks anyway...
Working link here:

https://www.stuff.co.nz/national/121...ges-for-air-nz
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Old 30th Apr 2020, 20:52
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Originally Posted by InZed View Post

I can see the last ounce of Forans enthusiasm for this job evaporating if that happens. He's already stated becoming an SOE would be a terrible outcome for the airline.


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