Friday, 29 May 2020

Air New Zealand grounds Boeing 777s

AIR NEW ZEALAND B777-319 ZK-OKO (CN 38407) 

Air New Zealand will be grounding its Boeing 777-200 and 777-300 fleet until at least end of this year or until April 2021, as part of cost saving measures it undertakes.  The grounding comes as the airline plans for a slow gradual entry back into international travel. As a result, the airline plans to lay off nearly 1,000 flight attendants from its international fleet. The number of employees who work on the Boeing 787 Dreamliner fleet will also be reduced. Service manager roles will reduce from 157 to 142, and flight attendant numbers will be cut from 514 to 443. Chief revenue officer Cam Wallace said that the use of the 777 fleet would depend how quickly borders reopen. Their website is reporting an internal staff memo which confirms the 777s, which are a key part of the airline's long haul fleet, would not be used on passenger flights for up to a year but could be used for freight movements. Wallace also said orders for the latest model of the Boeing 787 Dreamliner's have been pushed back slightly. And while there has not been an announcement yet, the chances of starting the non-stop services to New York in October look slim. The airline is operating a skeleton service domestically and to a few overseas destinations, as well as freight services. It is steadily working through moves to make a third of its workforce redundant and so has so far been paid $70 million through the government wage subsidy scheme. The airline has battened down hatches as it restructures and relies on a $900 million government loan to see it through the immediate future.

Airline made the following changes to stay afloat during this crisis.
– Labour reductions of approximately 30%, or 4,000 employees, which is expected to drive annualised savings of $350 to $400 million
– Suspension of all short-term incentive schemes for the 2020 financial year
– Reduction of the Executive team by 30%
– A 15% reduction in the salary of the Chief Executive and Executive team, together with a 15% reduction in Director fees through to December 2020
– Institution of a hiring freeze and voluntary leave options
– Deferral or cancellation of almost $700 million in expected capital expenditure to December 2022, including deferrals of planned A321neo deliveries
– Also, grounding of airline’s Boeing 777-200 and 777-300 fleet until at least the end of calendar 2020.

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