Air NZ casts eye over top jobs

Rob Fyfe

The axe is poised to fall on jobs at Air New Zealand's head office under a drastic new business plan that leaves little room for any divisions not performing at "world-class levels".

The hard-nosed policy was outlined by the airline's new chief executive, Rob Fyfe, to a gathering of Sydney financial analysts yesterday.

His presentation came as reports emerge of widespread job cuts at Air New Zealand's headquarters, where corporate, financial and IT jobs were expected to be targeted.

Although not confirming any cuts, the airline has said it has introduced a freeze on corporate recruitment.

Yesterday, Mr Fyfe signalled a review of underperforming routes.

About 600 engineers at the airline are due to hear in the next two weeks whether attempts to save their jobs have been successful.

They were told last month that all heavy engineering and maintenance work would be sent overseas, saving the airline $20 million a year.

As 80 per cent shareholder, the Government has said it will not interfere in Air New Zealand's decision to lay off the engineers, so is unlikely to provide any comfort to threatened head-office staff.

Mr Fyfe outlined a tough approach to the business for his Australian audience yesterday, an approach that "required a hard-edged commercial and pragmatic view on elements not in our strategy".

He said "Phase IIB" of the airline's plan was about simplifying the business, improving productivity and margins and creating agility.

Adaptability also meant new air routes should be explored, and "markets in decline" should also be reviewed.

In a message sent to staff this month, Mr Fyfe pondered the airline's future.

He said he had just spent two days with his top managers having healthy debates about how these challenges should be addressed.

"What we all agreed is that if Air New Zealand is to become a great airline, then every part of our business must perform at world-class levels and must be a source of competitive advantage.

"Businesses that don't have a prospect for achieving world-class status will inevitably become candidates for outsourcing or alliances with third parties who can deliver us world-class levels of performance."

Asked to comment on reports of looming job cuts at head-office level, spokesman David Jamieson said the airline, "like any large business", was constantly reviewing all aspects of its operations.

"The corporate functions of the business are regularly reviewed, just like the rest of the business," he said.

A recent restructuring of its marketing and public affairs department had led to a 25 per cent spending cut in the past 18 months.

The airline's share price has languished this year, falling from a year-high of $1.69 to a low of $1.07 in October.

It has since risen to just under $1.20.