Air New Zealand’s International Capacity Is Down 95%

Air New Zealand has extended its reduced schedule of international flying through to August 31. With just a handful of services to a limited range of destinations, overall international capacity is down 95% on levels achieved before the pandemic struck.

Air New Zealand has pushed its reduced international flight schedule through until the end of August. Photo: Getty Images

The airline’s strategy and alliances officer, Nick Judd, tried to put the best light on the dire state of affairs yesterday. In a statement, he said.

“While it’s unfortunate the majority of our international network remains canceled for the foreseeable future, we support the return of safe flying if borders re-open and will update our international network if and when possible.”

Just over twenty international services a week

As the lockdown eases in New Zealand, the airline has ramped up its domestic flying, restarting some routes and putting previously unseen planes on some sectors, including a thrice-weekly Dreamliner service between Christchurch and Auckland.

But with borders closed in most countries, international flying remains in the doldrums. Yesterday, Air New Zealand confirmed it would continue to operate the following international sectors through to the end of August.

  • Auckland – Sydney – Auckland (four times a week)
  • Auckland – Melbourne – Auckland (three times a week)
  • Auckland – Brisbane – Auckland (three times a week)
  • Auckland – Nuie – Auckland (weekly)
  • Sydney – Norfolk Island – Sydney (weekly)
  • Brisbane – Norfolk Island – Brisbane (weekly)
  • Auckland – Los Angeles – Auckland (five times a week)
  • Auckland – Hong Kong – Auckland (two times a week)
International capacity is down 95% on 12 months ago. Photo: Tom Boon / Simple Flying

Air New Zealand notes there are current entry restrictions in its regular Pacific destinations of  Fiji, Tonga, Samoa, Rarotonga, New Caledonia, and French Polynesia. The airline indicates that if these entry restrictions lift, weekly flights to these destinations will commence.

Jobs lost as Air New Zealand works to halt cash burn

Last week, Air New Zealand announced it would permanently stand down 1,300 employees, with over half that number being long-haul and mid-haul employees. The pain hasn’t been felt just among Air New Zealand’s frontline staff. The airline’s senior executive team has downsized from nine to six people. Air New Zealand expects it will take several years to get back to normal. In the meantime, it is warning of a smaller airline and some heavy losses.

The most recent job losses form part of a broader workforce reduction of approximately 4,000 employees (30% of the overall Air New ZealaCapacind workforce) that is expected to save USD$229 million in payroll expenses.

“We are preparing for a scenario in which the airline is still 30 percent smaller than pre-COVID levels in two years’ time,” chief financial officer Jeff McDowall told the New Zealand Herald.

Get ready for a smaller Air New Zealand. Photo: Tom Boon / Simple Flying.

The airline is expecting to report a loss of USD$341 million in the 2020 fiscal year. By reducing outgoings and expenses, Air New Zealand hopes to cut its monthly cash burn to around USD$33 million. The airline is sitting on cash reserves of USD$390 million and has a USD$550 million government loan facility it can draw against if needed.

“We know that demand for air travel will eventually rebound, so we are cognisant of striking the right balance between removing cost from the business and ensuring the airline is in a strong position to ramp up as demand recovers,” said Mr McDowall.