The "unprecedented" spread of Covid-19 has prompted Air New Zealand to reduce flights on its Asia, Tasman and Domestic networks, with CEO Greg Foran also taking a voluntary pay cut of $250,000 to ease the financial blow from the outbreak.

In a statement released on Monday, the airline announced it was extending the suspension of its Shanghai service through to the end of April, and further consolidating its services to reduce capacity across Asia by 26 per cent and its overall network by 10 per cent in the wake of the virus.

Mr Foran said there had been an additional softness in demand across the past week, driven by the further spread of Covid-19 to countries outside of China, including New Zealand.

Air New Zealand Covid-19 measures:

• Overall capacity reductions of approximately 10 per cent across the network.
• Asia capacity reduction of 26 per cent through June, including extension of Shanghai route suspension through April.
• Tasman capacity reductions of 7 per cent through June.
• Pacific Islands capacity reductions of 6 per cent through June.
• - Reductions across the Domestic network of approximately 4 per cent, with a 10 per cent to 15 per cent reduction in March and April.
• Various labour initiatives including a voluntary reduction in CEO pay, a hiring freeze for all non-critical roles and voluntary unpaid leave for operational staff.
• Deferral of non-urgent capital spend and any non-critical business activity.

"We have been continuously monitoring bookings and in recent days have seen a further decline which coincides with media coverage of the spread of Covid-19 to most countries on our network as well as here in New Zealand," he said..

Like the vast majority of its industry peers, the airline is also pursuing a range of mitigations in response to the decline of demand including the deferral of non-urgent capital spend and non-critical business activity across operational and corporate functions.

Mr Foran revealed he has offered to reduce his base pay of $1.65 million by approximately 15 per cent ($250,000) with the support of the Board, and Air New Zealand’s Executive team will extend their salary freeze that has been in place since May 2019. 

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Source: Air Zealand

The airline has also implemented a hiring freeze for all roles that are non-critical and will offer operational staff the option to take unpaid leave in addition to managing annual leave balances.

"Air New Zealand is a strong and resilient business operated by a world-class team with deep experience having navigated prior shocks to our business and industry," said Mr Foran.

"While we have already made swift adjustments to our operations, we are prepared to take further actions to address the ongoing demand impact of Covid-19."

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