As the redundancy axes swing through Air New Zealand's head office, the airline is now looking at hiring Chinese flight attendants to crew its new flights to Shanghai.

The national flag-carrier announced yesterday that it is to lay off 470 sales, marketing, accounting, finance and human resources staff to save $45 million a year.

The plan was first reported in the Herald last November, when chief executive Rob Fyfe warned that any part of the business not at "world class" standards would be at risk.

Now the Herald believes that the airline is considering hiring Chinese flight attendants for its Shanghai services. A spokesman confirmed that the company was investigating staffing options for its Shanghai services, but said it had yet to decide where crew would be based when flights start in November.

Air NZ already has some foreign employees; there is a cabin crew based in London, staffed by British residents.

Most of the latest job cuts will be from its Auckland HQ, where staff numbers will fall from 1890 to 1420.

Reports that pilots could be next in the firing line were denied yesterday by Mr Fyfe.

"There are absolutely no plans for any review of pilots or cabin crew.

"We recently negotiated three-year contracts with both groups that have met the needs of both the company and crew and together we are focused on our significant growth plans, which will see Air New Zealand-employed pilot and cabin crew numbers increase over the next 12 months."

Redundancy payouts for the corporate workers will cost the airline around $15 million.

The Engineering, Printing and Manufacturing Union is challenging the latest round of layoffs, saying it is time the airline worked with its employees for the sake of everyone.

National secretary Andrew Little said it was unbelievable that another 470 jobs would go after "the drama over contracting out engineering".

But Mr Fyfe said: "This is not about outsourcing, this is about fundamentally saying for the last six months our fuel price is up $174 million.

"These are valuable people - today making a valuable contribution - but simply the economics of the business don't allow us to continue to be able to commit resources to some of those functions."

* The airline yesterday reported a $46 million after-tax profit for the last six months of 2005, down 55 per cent on the previous period.