War and deadly disease 'soften' Air NZ revenue

National carrier Air New Zealand says forward bookings on its key international routes are softening because of the war in Iraq and the outbreak of a deadly respiratory disease in Asia.

Air NZ said yesterday that the decline in bookings for the time to the end of June was "very modest", but that some key routes had been hit harder.

"In addition, the profile of bookings is changing. Higher than usual levels of late cancellations are being experienced and the booking period is also shortening," the company said in a statement.

Air NZ said flights most affected were Los Angeles to London and those between New Zealand and Japan, Singapore and Hong Kong.

Forward bookings on those routes were down 5 to 10 per cent after adjusting for Easter occurring in April rather than March, it said.

"The impact on these routes is considered to be driven by the impending war in Iraq, compounded by the impact of the SARS outbreaks in Asia."

Tensions surrounding North Korea were also cited as a factor causing weaker demand out of Japan and North Asia.

The World Health Organisation has issued its first global warning in a decade over Severe Acute Respiratory Syndrome (SARS) - which has been blamed for the deaths of about 14 people, mainly in Asia.

Airlines around the world have been bracing for the impact of a war in Iraq, cutting jobs and services to reduce costs ahead of an expected travel and cargo slump.

Australia's Qantas Airways, which is seeking regulatory approval to buy a 22.5 per cent stake in Air New Zealand, announced plans on Tuesday to temporarily axe the equivalent of 1000 jobs.

Air NZ said it was too early to determine the effects on its bottom-line or whether services would be altered.

"The impact of changes in forward booking profiles on profitability and schedules is still being considered."

* Air New Zealand's international flight attendants have lifted strike notices on the brink of a court hearing.

A full bench of Employment Court judges, which had assembled in Auckland yesterday to hear an injunction application by the airline, was told of an 11th-hour settlement.

The case was seen as an important test of employment law relating to the right to strike.

The Flight Attendants and Related Services Association suspended a strike threat in January in anticipation of the court hearing, but issued new notices of its intention to orchestrate a wave of stoppages by about 1000 cabin crew members if the airline lost.

These would have included a 24-hour strike to be followed rapidly by three 48-hour stoppages, forcing cancellations or delays to international flights.

Neither the airline nor union will disclose details of a settlement reached in principle over the industrial dispute before meeting today to confirm it, subject to an acceptance vote by the flight attendants.

Chief Judge Tom Goddard congratulated the parties for reaching an agreement, even though he said he and two fellow judges had been "looking forward to a good argument".