Air NZ Cries Poor To Workers - Not Shareholders

4 April 2008

Air NZ Cries Poor To Workers Shareholders Get Different Story

Air New Zealand management today painted a bleak picture of an airline struggling to survive a rapid decline in revenue and increased costs. Yet on Wednesday they told a Parliamentary Select Committee they had $1 billion in the bank.

Air New Zealand Retail Manager Sarah Williamson told Service and Food Workers Union negotiators there had been “a sea-change in the company’s position” since December.

SFWU Northern Region Secretary Jill Ovens says Air NZ used the excuse of a dramatic decline in the company’s fortunes to justify a reduced offer to groundstaff working in the call centres, Holiday Stores, financial services and cargo.

“They sat there and told us they had reduced their offer by 0.5%, over a longer term, and there would be no lump sum to compensate for the delay in paying out. All the provisions our members rejected just before Christmas were still in the company’s proposed agreement.”

The SFWU has asked the Employment Relations Authority to facilitate a settlement, and the Authority sent the parties back to mediation for one last attempt to come to agreement.

“It was clear Air NZ had no intention of trying to reach a settlement. They made yet another offer they knew our members couldn’t accept,” Ms Ovens says.

“Their pleas of poverty don’t sit well as we know they’ve been telling their shareholders a different story.”

In his interim report to shareholders, CEO Rob Fyfe reported a “strong financial position” and heralded a period of “excellent progress for Air New Zealand”.

“Looking at the range of scenarios that could emerge over the next 12-18 months, I am confident that we are well positioned to address the challenges and capitalise on the opportunities,” Fyfe stated.

Air New Zealand reported earnings before tax were up $159 million in the six months to December 2007 compared with the same period a year before.

The company has $1,222 million in cash reserves, up $165 million from the previous 6 months. The Board declared an interim dividend of 5 cents a share, up 67% on last year’s dividend.

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