Covid 19 coronavirus: Air NZ boss stands firm on ticket refunds, says more costs need to be saved

Air New Zealand A321-20 aircraft parked up on the tarmac during alert level 3. Photo / Brett Phibbs

Air New Zealand is so cash-strapped their chief executive says there is no chance of customers with non-refundable tickets being refunded.

And after making more than 3500 people redundant recently, it hoped to cut costs even further with a goal of shedding $150 million worth of labour costs.

However, Air NZ chief executive Greg Foran said the airline had not put a number down in terms of people losing jobs.

Air New Zealand Chief Executive Greg Foran. Photo / Phill Prenderville

Speaking to Newstalk ZB's Mike Hosking this morning, Foran understood why passengers with non-refundable tickets were frustrated but his hands were tied.

"I completely understand the frustration of our customers, frankly, we're frustrated too," Foran said.

"The reality is that customers who have got a non-refundable fare, we can't provide cash for that so instead we're heading down the path of credit."

Mike Hosking at work in the Newstalk ZB studio. Photo / Michael Craig

The airline was making sure it was being as flexible as possible around the terms of the credit, from the length of time to using it on multiple trips.

Earlier this week, Air NZ chief revenue officer Cam Wallace met with Consumer NZ chief executive Jon Duffy following tension around the non-refundable tickets.

Consumer NZ had been pushing for refunds on non-refundable tickets, saying Kiwis needed cash not credits.

"From a legal perspective, Air New Zealand is right to the extent of saying it doesn't have a legal obligation to refund non-refundable tickets," Duffy said.

"Our position is that the law is broken, the law needs to be fixed. And that doesn't mean you don't have a moral obligation to refund consumers now."

Elsewhere, Foran told Hosking he thought the process of opening up a transtasman bubble with Australia was taking an appropriate amount of time.

There were a number of challenges which needed working out, including the issue surrounding transit passengers.

It was looking likely the transtasman bubble would be active around August-September, Foran said. He hoped a bubble with the Pacific would come faster.

Consumer NZ chief executive Jon Duffy. Photo / Supplied

"I'd really like to get into the Cook Islands and Niue sooner rather than later," Foran said.

"There are some good discussions occurring there and we are part of that. If we can pull something together there reasonably soon then I think that would be a good thing."

Foran did not think the Government was holding up the process despite New Zealand and the Cook Islands both having no active cases of Covid-19.

The airline did need to continue to cut costs, Foran said.

On May 20, it was announced more than 1300 cabin crew would lose their jobs - out of 1600 long and mid-haul crew, 950 would be let go.

Air New Zealand Boeing 777-200 parked up on the tarmac during alert level 3. Photo / Brett Phibbs

Three-hundred domestic crew workers would also be made redundant across Auckland, Wellington and Christchurch.

While they hadn't put a number down in terms of people, Air NZ had put a challenge out to try to cut $150 million from its labour bill.

"We also want to save some more operating costs and see if we can get some capital down," Foran said.

"We're up for considering any reasonable ideas on how we get there as we work through with all our Air NZers and want to stress, it's not just about redundancies."

Asked whether Air New Zealand would be going for a capital raise, Foran said it was continuing to assess its options.

The airline would provide any further updates to the market as required, he said.