Air New Zealand Ltd. will slash its long-haul capacity by 85%, suspend some routes to North America and Asia and begin job cuts amid travel restrictions caused by the coronavirus pandemic.
Shares in the airline, which have declined 47% this year as the outbreak hits the aviation industry globally, were placed in trading halt Monday while the company assesses the financial impact of global travel restrictions, it said in a statement.
“We are now accepting that for the coming months at least Air New Zealand will be a smaller airline requiring fewer resources, including people,” Chief Executive Officer Greg Foran said, adding the airline is consulting with trade unions. “We have deployed a range of measures, such as leave without pay and asking those with excess leave to take it, but these only go so far.”
Under cost-saving measures, board directors will take a 15% pay cut until the end of 2020, the airline said, adding it is in discussions with the government.
Airlines in Europe and the U.S. have cut flights, idled planes and drafted plans to eliminate jobs, while seeking government support to weather the most brutal downturn in the industry’s history. The economic effects of the viral outbreak have slammed the airline industry as people scrap travel plans and countries place restrictions on passengers from nations with the highest levels of infection. Both Australia and New Zealand have announced that anyone arriving in their countries must self-isolate for 14 days.
Air New Zealand will suspend flights between Auckland and Chicago, San Francisco, Houston, Buenos Aires, Vancouver, Tokyo, Honolulu, Denpasar and Taipei from March 30 to June 30, while its London to Los Angeles service will be suspended from March 20/21. Routes to Australia and Pacific Island nations will be “significantly reduced” from April to June, and the domestic network will be cut by about 30% next month and in May, it said.
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