The flag carrier of New Zealand shared its plans on how to get back on its feet, as Air New Zealand tries to recover from the coronacrisis. The aim is to be profitable once again by August 2022, when the carrier plans to post its annual financial results.
The plan is for the airline to survive, revive and thrive, despite the fact that Air New Zealand anticipates being a 70% smaller company compared to its size prior to the breakout of COVID-19. Fewer employees, passengers and wide-body aircraft are on the agenda. So far, the airline has put its Boeing 777 fleet into long-term storage and let go of 4,000 employees. However, cash is still scarce.
Various other cost-cutting measures allowed Air New Zealand to lower its wage bill by two thirds, but revenue “has fallen by more than two thirds,” indicated the airline’s chief executive Greg Foran.
“We need to balance the scales further,” noted Foran. The airline will now remove $97.8 million (NZD150 million) from its expenses bill to put “Air New Zealand in the shape to be able to meet our 800-day ambition for August 2022,” added the executive.
Long-haul postponed to 2021
While the survival phase has its clear goals to reduce the cost base of the airline, the next phase is standing on shaky grounds. The airline plans to slowly ramp-up operations starting from September 1, 2020, if the cost-cutting program goes according to the plan and New Zealand’s government loosens travel restrictions, allowing intra-Tasman and intra-Pacific flying for both business and leisure passengers.
Amidst the downturn in the industry, Air New Zealand‘s only glimmer of hope was extra cargo-only flights, stated Foran.
But the airline’s return to success does not include long-haul flights, at least until 2021. Only if a vaccine appears, the local lawmakers would once again open up its borders and allow growth in long-haul business, the company believes. Air New Zealand previously planned to launch a direct connection between Auckland, New Zealand and New York’s Newark Liberty International Airport (EWR), but the plans were derailed by the current pandemic and postponed to late-2021. Going forward, focus on digital services and on the customer experience onboard will help the airline thrive, indicated Foran.
“This event is not a hiccup; very few airlines will return to the former ways of working.”