Airport Services Update

Media Release

12 October 2006

Airport Services Update

Air New Zealand today advised unions representing Airport Services staff that it will enter into a formal 58-day consultation process on the future direction of the division effective immediately.

Group General Manager People Vanessa Stoddart says that as part of the process Air New Zealand will be sharing with the unions the detail of improvements a third party supplier believes it could achieve if a decision was made to outsource the work.

“Our strong preference is to work with staff and their union representatives to develop a market competitive in-house solution. However, if we can’t do that Air New Zealand will be forced to look to a third party airport services provider to deliver this service, just as all other airlines flying into and out of New Zealand do,” says Ms Stoddart.

Approximately 45% of the revenue in Airport Services comes from third party airline customers.

“These customers are telling us we are no longer competitive. We lost the Singapore airlines business last year, we lost the Jetstar business earlier this year and Qantas domestic terminated their contract with us a few weeks ago on the basis that they perceive we are no longer competitive. The loss of that contract could jeopardise approximately 160 Airport Services jobs,” she says.

Ms Stoddart says developing an in-house solution to make parts of Air New Zealand more competitive is not something new to the airline or unions. Earlier this year Air New Zealand accepted a union proposal that averted the outsourcing of a significant amount of work in its engineering business.

Airport Services is the part of Air New Zealand that manages processes ranging from check-in to loading luggage for Air New Zealand and many other airlines in New Zealand. It employs 1675 full and part-time staff based at Auckland, Wellington and Christchurch airports.

Note: Air New Zealand currently outsources its ground handling operations at nearly all overseas airports and at some provincial New Zealand airports.

ENDS

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