25 Feb 2012

Union says Air NZ job cuts an over-reaction

5:43 am on 25 February 2012

A union representing some Air New Zealand staff members who stand to lose their jobs says the company is over-reacting.

The company says its net profit after tax in the final six months of 2011 was $38 million - a $60 million fall from the same period a year earlier.

Air New Zealand plans to cut 441 positions by the end of the financial year in June amid falling profits. Chief executive Rob Fyfe says the vast majority of the jobs to go will be management and support roles.

The company says 266 jobs are being cut through staff not being replaced or contracts not renewed, and 193 of these positions have already gone. A further 175 people will be made redundant.

The Service and Food Workers' Union says some of its members who work in the company's clerical, call centre and cargo divisions may lose their jobs.

Union spokesperson Len Richards says the cuts are unnecessary and a knee-jerk reaction as Air New Zealand is still a profitable company.

Mr Richards says the job cuts may be a way for Air New Zealand to streamline the company before the Government sells it.

The Engineering, Print & Manufacturing Union says it will test whether the proposed job cuts can be justified.

Thirty of its members who work in managerial roles and in cargo and ground service equipment are set to lose their jobs.

EPMU national aviation organiser Strachan Crang told Checkpoint on Friday that the airline's announcement is a shock.

Mr Crang says in coming weeks, union members will test whether their redundancies can be justified and will seek an alternative proposal.

Profits take a dive

Air New Zealand reported a fall in profits in the six months to December on Friday.

Normalised earnings, which incorporate new accounting rules, fell 71% and net profit after tax fell $60 million to $38 million.

The company blames higher fuel costs and an inability to pass higher costs on to passengers due to weak financial conditions.

It has sought to reverse this with a combination of cost reductions, improved efficiencies and revenue growth.

Domestic travel benefited from sports fans during last year's Rugby Word Cup, but the international long haul network was difficult.