Airways to cut 180 jobs as air traffic collapses

7th April 2020 By Staff Reporter | news@tourismticker.com | @tourismticker

Airways is to cut its workforce by 25% over the coming year following the collapse in air traffic because of the coronavirus outbreak.

The state-owned air traffic company said it would reduce its cost base by 30% and that 180 of its staff would be made redundant.

Graeme Sumner

The cost-cutting follows the suspension of Jetstar and Air New Zealand services, which had led to a 95% fall in domestic passenger flights.

“It is true that we are operating in an aviation environment unlike anything seen since the second world war,” Airways chief executive Graeme Sumner said.

“In December 2019, there were 25 international carriers operating in New Zealand and now there is effectively one.”

Domestic traffic would recover at a modest pace after the lockdown, however, international services could take up to two years to recover.

“While the current reality is stark, we are looking ahead to recovery and will be working with the industry to find ways to support future growth,” Sumner said.

“It’s essential that we can continue to provide a safe service during the pandemic and support the industry with an equally safe and cost-effective service when tourism and aviation does eventually recover.”

Airways received a $70m equity injection from the Government two weeks ago to help alleviate the impact of the coronavirus outbreak.

“While we are greatly appreciative, and this package has made a significant contribution to cushioning the blow, it cannot realistically offset the 95% decline in revenue we are currently facing,” Sumner said.

Airways had revenue of $239.1m in FY19 and net profit of $23.6m.