KEY POINTS:
Air New Zealand yesterday defended the pay deal it gives its Shanghai-based flight attendants during an appearance before a parliamentary select committee.
Leaders of the airline - which is majority-owned by the Government - appear once a year to face questions from MPs about its performance and strategies,
and yesterday chief executive Rob Fyfe addressed the sensitive Chinese pay issue when Labour MP Mark Gosche, a former trade union official, asked about it.
Mr Fyfe said the total employment cost for the Shanghai-based crew was $46,000 each a year, and "we don't perceive that to be a low rate of pay".
That package compared with an equivalent total employment cost for the airline's NZ-based flight attendants of $58,000 a year.
The Chinese crew flew about 75 per cent of the hours that the NZ-based crew did, Mr Fyfe said, and part of the allowance regime was a payment per hour of flying.
"In China we pay the staff directly, but we pay the government a 46 per cent tax effectively for their social benefits and so on."
He said recent Herald reports about the issue had focused on a specific base salary rate which bore "no resemblance" to the total remuneration for those employees.
Air NZ's decision to set up a crew base in Shanghai was not financially driven, and the saving from it was not material for the firm, Mr Fyfe said.
The primary motivation was that 90 per cent of travellers on the Shanghai service were Mandarin speakers, and more applications from Mandarin-speaking attendants came in China.
Mr Gosche described the issue as something that had been "a bad look" in a public sense for the airline.
Mr Fyfe said Air NZ paid flight attendants based in Britain and US the going rate in those countries, as it did in China, whether the amount was higher or lower.
Air NZ has repeatedly refused to provide the Herald with a breakdown of the $46,000 it claimed each Shanghai crew member was costing, citing commercial sensitivity.
Spokesman Mike Tod said yesterday: "Our position has not changed on the matter of providing a breakdown of the total cost of employment."
But payslips issued by the airline to the crew stated their annual base pay to be $6240 plus a flight allowance of $4.30 per hour.
The only other payment received by the crew which the Herald is aware of is a $55 away allowance and a further allowance for meals at a Chinese restaurant or their hotel.
An Auckland lawyer said taxes and government levies - which could make up part of an employer's cost - were not part of the legal definition of "wages" and employers could not claim them to be a part of a staff member's salary.
"Just like in New Zealand, employers cannot claim that their ACC contribution is part of what they pay the employee."
THORNES' UPGRADE
Air New Zealand has offered a free flight upgrade to the family of former All Black and MP Grahame Thorne after a series of failures they say ruined their Australian holiday.
Mr Thorne's wife Briony wrote to Air New Zealand chief executive Rob Fyfe to complain about the cancellation of flights to and from Brisbane, the loss of important baggage, and being treated with "disdain" by airline staff.
The recent trip to Brisbane was a special treat for the Thornes' son David, who is unable to speak or fully function after being injured in a rugby tackle in 2006.
Bags that went missing on the flight over, after no baggage tags were provided, contained important medicines for David, leaving the family highly stressed, Mrs Thorne said.
Air NZ customer support manager Derek Pereira said the issues raised were of concern. "We will also be happy to offer you and David a space-available upgrade on your next trip across the Tasman," Mr Pereira wrote.
"This upgrade is subject to seats being available on the day ... Once you let me know when you have your bookings in place, I will arrange this for you."
Jarrod Booker
