Salaries are Frozen at Air New Zealand

Air New Zealand has decided to freeze the salaries of senior executives and review the operations that are not essential to the company now that the demand for air travel is slowing down and the cost of fuel continues to soar even higher. Rob Fyfe, the chief executive officer for Air New Zealand, told Bloomberg News in an e-mail that pay raises will be achieved for managers with individual agreements through increased productivity or headcount reduction. Just last week the airline announced that they were rising the price of their fares for the fourth time this year as they are trying to offset the 58% increase that jet fuel prices have made in the last half year. Also, they said that their profit for the whole year was expected to drop by over 23% because of the higher prices.

Fyfe says that he has challenged every division to identify where there are opportunities to review activities that are not necessary and to reduce the number of their employees through non-replacement and attrition of positions that aren’t critical. He also said that the freeze of the salaries is not just applied to executives, but to himself as well, and the income of other managers will decrease as the year goes on since bonuses are connected to the financial performance of the airline too. Air New Zealand is working to achieve settlements that are fair for the workers that are under collective agreements, but it will be difficult to continue lifting wages along with inflation if the economy continues to deteriorate, he added.

Learn more about Air New Zealand at: www.airnz.com