Business class axed for cheaper Air NZ flights

By CATHY ARONSON

Air New Zealand is promising much cheaper domestic flights and a new user-friendly online booking system as it strives to make money again.

The national carrier is also cutting its domestic business class, domestic inflight meals and 200 jobs.

The no-frills, one-class domestic service - known as Air New Zealand Express - will replace the existing Boeing 737 economy and business classes, increasing the overall number of seats by 14 to 136.

As well as cutting inflight meals, there will be no alcohol or snacks and passengers will be provided only tea, coffee and water.

Koru Club lounges will also be upgraded and provide meals earlier and later in the day.

The airline has been cutting costs and selling assets since the Government was forced to pay $885 million to bail it out last year.

The new domestic service will be similar to its budget subsidiary, Freedom Air, but Express passengers will pay more for direct connections to international flights, priority baggage and lounges.

Chief executive Ralph Norris said domestic flight prices would be significantly cut but he refused to reveal details, saying the new prices would be announced in July.

On getting rid of the business class, he said that on average only one in four domestic business class seats were booked - the rest were either upgrades or frequent flyer customers.

To help reduce costs, the airline plans to cut about 200 jobs, mainly in administration, although some flight attendants will also lose their jobs.

Eighty of the 300 flight attendants on short-haul flights have already applied for a $10,000 exit package, offered this month.

Some attendants may be re-employed for international short-haul flights, which the airline yesterday announced it would be increasing.

The number of weekly short-haul flights from Auckland to Sydney will increase by eight to 28, Auckland-Fiji flights will rise by one to eight, and the daily Christchurch-Sydney flight will be a Boeing-767 instead of the smaller 737.

There will also be extra long-haul flights from Auckland to the United States, Japan and Hong Kong over the next 18 months.

Council of Trade Unions secretary Paul Goulter said administration and management sales staff may be the most affected and lose their jobs to the new online booking service announced yesterday.

The airline wants to shed a total of 800 staff - from 9600 to 8800 - by the end of next month to save about $50 million.

Mr Norris said it had nearly finished making the cuts, mainly in management.

The change in the service leaves Qantas open to capture Air New Zealand's business class passengers. Qantas provides boxed meals and a business class on the main trunk route.

It now has 20 per cent of the domestic market.

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