Air NZ wields axe as profits dive

Air NZ wields axe as profits dive
By admin

Air New Zealand is set to slash 175 jobs with more to go through non-renewal of contracts as the airline revealed is profits had continued their downwards spiral in the six months to December 31 2011.

The airline announced normalised earnings before tax of $33 million for the half, a staggering 71% decline on the same period last year. Net profit after tax was $38 million, down $60 million.

The international network was at the root of the losses, failing to show signs of recovery, according to chairman John Palmer.

"The airline has enjoyed a solid performance from the domestic network including benefits from the Rugby World Cup and improved market share on the Tasman, but the international long haul network continues to face a challenging time in the European and Japanese travel markets," he said.

Chief executive Rob Fyfe blamed the "disappointing" result on jet fuel prices and a weak global economy.

He revealed that the airline had already commenced a series of initiatives to improve its profitability by an anticipated $195 million per annum by 2015 including a considerable restructuring of roles within the business.

Fyfe specified that 441 roles would be trimmed from the business by the end of the financial year.

"A total of 266 of these roles are being exited through non replacement of roles or non renewal of contracts, of which 193 have already been achieved," he said.

"The removal of the remaining 175 roles will result in redundancies and we begin the consultation process with affected staff this morning."

Looking forward, Fyfe said that the airline would try to build revenue on the back if its recently launched One Smart card, the development of additional alliances with airline such as Japan's All Nippon Airways, new services to Bali and Maroochydore, and increased capacity to Vancouver, San Francisco and Los Angeles.

He also revealed that the airline would venture to South America for the first time with a charter flight to Buenos Aires in September using its new all black Boeing 777-300.

But the airline admitted that achieving last year's full year result would be "a challenge".

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