Key Points:

Air New Zealand says it can't rule out further job losses on top of up to 200 redundancies announced as demand for long-haul travel slumps.

Around 100 international cabin crew positions and a similar number of backroom engineers and head office staff will be cut.

Air New Zealand chief executive Rob Fyfe said the volatile airline sector made forecasting impossible.

"I'd love to be able to guarantee there won't be more job losses but I can't do that. The next six to 12 months are very difficult to forecast."

The airline had reduced long-haul capacity by 8 per cent so far this financial year with reduced services to Britain, Japan and China.

By June, the reduction would be at 13 per cent.

The airline, which has 11,500 staff, hopes to save more than $20 million a year through the current redundancies and a review of all spending.

For the past year all airlines have been hit by record fuel prices and then plunging demand amid global economic turmoil.

Mr Fyfe said Air New Zealand had been working on a number of steps to minimise redundancies including moving some staff on to part-time work and offering salaried staff the option of a four-day week and some pilots leave without pay.

There had been a freeze on hiring non-safety-related staff and the airline had cut back on part-timers to preserve fulltime jobs.

However, cuts were now unavoidable. Most of the cabin crew redundancies - about 10 per cent of the long-haul pool - would be on a voluntary basis.

"We have identified that we're approximately 100 people overstaffed but our attrition levels are not going to address that rapidly enough."

Mr Fyfe said it cost about $100 million a week to run the airline and things could go wrong rapidly if costs were not contained in the current climate.

"You can burn through a lot of cash if you don't adapt your business very quickly when your revenue and customer demand start to fall."

About 68 jobs will go in technical operations among engineering support staff and planners rather than shop-floor engineers.

Separate reorganisations are taking place in subsidiary businesses, including Safe Air in Blenheim, with a small number of redundancies planned. It was expected consultation and the process of identifying those being made redundant would be over by Christmas.

George Ryde, secretary of the Association of Aviation and Marine Engineers, which covers technical operations workers, said some members were in shock after receiving letters yesterday telling them their jobs were going.

"It's not the kind of thing anyone wants in the lead-up to Christmas."


* Airlines around the world have laid off 40,000 staff this year.
* Airline losses are expected to reach $10 billion this year.
* About 25 airlines have gone out of business.