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Air NZ pilot redundancies

Old 27th Apr 2020, 07:03
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Air NZ rejected the voluntary severance of around 40 777 Captains because it's too expensive.
If redundancies were by fleet and not last on first off, they would be liable for Redundancy payments for a larger number of 777 Captains (and FO's) than they just rejected. It would of cost them an awful lot more to do the redundancies by fleet than by seniority.

The cost of down-training isn't a real cost while we're all sitting around at home doing nothing. It's more the logistical timeframe that makes it undesirable.
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Old 27th Apr 2020, 07:25
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Airlines like ANZ love the seniority system...it’s going nowhere fast so relax.

A plan agreed to by the unions will pass, where to minimise costs the 320 pilots will still fly the 320 but a bit of seat shuffling will/may occur. No wide body pilots are going anywhere for a while...so use up that leave, go drive a truck if you have to. All this training talk nonsense is just that...until the world starts spinning again.

The company has an idea of number of pilots required on the other side. There will still be the usual destinations and excessive redundancies are counterproductive to this plan. Once a new international flying program is developed there will be downward movements but why/how can they form decisions regarding crewing allocations at the moment. It’s a mugs game. This is highly unsettling times. ANZ has taken decisive action, and compromises will still be required before the status quo recommences...and it will.

All the very best.

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Old 27th Apr 2020, 08:40
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Originally Posted by Inverted Flat Spin
Yep. C20 here. I’d rather stay where I am on 50% for years than take 100% F20 pay.
Especially if you’ve done less than two years in the left seat and are expected to go through the whole rigmarole of command training again when you eventually get back there...
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Old 27th Apr 2020, 09:13
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Originally Posted by AerocatS2A
Yeah, like investors pore over the CEAs (which can be changed periodically) and vet the seniority system.

I am certain the seniority system in Air NZ will largely stay the same.
That's exactly what I'd expect a prudent investor to do. It's called due diligence.
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Old 28th Apr 2020, 01:31
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Don’t confuse the redoing of the command course (4 days in the classroom over 2 sessions) with a initial command upgrade. Look at the chapter on requalification training 4.25.
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Old 28th Apr 2020, 01:53
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Course Specs 3.8.1; Current policy says returning after less than 2 years in the left seat is treated as an first command upgrade. Fun times.
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Old 28th Apr 2020, 03:02
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Originally Posted by Out there
Don’t confuse the redoing of the command course (4 days in the classroom over 2 sessions) with a initial command upgrade. Look at the chapter on requalification training 4.25.
Looks like you’re correct, I’d heard from a few people you that you had to do it all again. That manual is as clear as mud.
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Old 28th Apr 2020, 03:42
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Originally Posted by ElZilcho
Air NZ rejected the voluntary severance of around 40 777 Captains because it's too expensive.
If redundancies were by fleet and not last on first off, they would be liable for Redundancy payments for a larger number of 777 Captains (and FO's) than they just rejected. It would of cost them an awful lot more to do the redundancies by fleet than by seniority.

The cost of down-training isn't a real cost while we're all sitting around at home doing nothing. It's more the logistical timeframe that makes it undesirable.
cost of the sim?
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Old 28th Apr 2020, 21:12
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Originally Posted by Flash Blackman
cost of the sim?
Well the SIMS, much like the Aircraft, are simply sitting there waiting to be used. To my knowledge, the Instructors and Techs, like the Pilots, are sitting at home twiddling their thumbs during Lockdown.
Obviously there are some costs associated with running the Sims, but again, like the Aircraft, a portion are fixed costs whether we use them or not.

I could be wrong here, but my understanding is that while everything has a "cost" to be counted, some are simply accounted for on the Balance sheets and don't actually "cost" cash. As an example, a Pilot doing a conversion costs the same daily rate as they do when operating, so the "cost" is the fact they've moved from a revenue generating service to a non-revenue generating service (training).

Right now, we're all being paid to sit at home, so we wouldn't be taken off revenue flights to be paid for a non-revenue generating conversion.
Besides a bit of power and maintenance for turning the SIMS on, there effectively is no "cost"... actually it could save money as Pilots complete type ratings and get down-trained to a lower salary.

I'd say the biggest hurdle to mass down training (at the moment) is time and the availability of line sectors.
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Old 28th Apr 2020, 21:36
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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
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Originally Posted by Ollie Onion
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
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Originally Posted by Ollie Onion
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
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
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
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Originally Posted by normanton
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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Originally Posted by normanton
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
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
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Originally Posted by ElZilcho
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, 05:33
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Originally Posted by Lepper Messiah
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
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
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Originally Posted by dctPub
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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