Air New Zealand warns of more job cuts, targets 'healthy profits' by 2022

[BENGALURU] Air New Zealand on Monday warned it could be forced to cut more jobs as it aims to return to "healthy profits" by 2022, and it said revenue in the next financial year would more than halve as demand plummeted due to the coronavirus crisis.

Under a new 800-day plan, chief executive Greg Foran said the company would engage with customers, staff and unions on how to further cut its wage bill, as he envisions the airline to be 70 per cent of its pre-Covid-19 size by August 2022.

"We must first survive, then revive and finally thrive," Mr Foran said, adding that the company estimates flying about 13 million customers annually in 2022, compared with almost 18 million before the pandemic.

Airlines have been among the hardest hit by the pandemic as global lockdowns halted operations and crimped demand. Even as countries re-open, many still foresee challenges as people may refrain from travelling and holiday locally rather than abroad.

Carriers including Air New Zealand have slashed thousands of jobs and set aside cash for impairments on aircraft, and Foran hinted at further pain as the second phase of a cost-cutting plan to save around NZ$150 million (S$136 million) began.

"I am really sorry we are in a situation of needing to reduce our wages bills further, but I believe this is what we need to do with some urgency," he said.

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Though the company expects growth to slowly return, it forecast revenue in the next financial year to be less than half of what it used to book earlier. It reported revenue from continuing operations of NZ$5.83 billion for full-year 2019.

REUTERS