Air New Zealand Implements Cost Cutting Measures

Air New Zealand is looking at ways of carving an extra five per cent from its overhead costs. The airline has described the overhead cost cutting as a 'business realignment project' which will last for three months. Last month, Air New Zealand had announced a review of its business.

Regional General Manager Asia, Scott Carr will be leading this project. He will establish a project team which will also include external consultants. The Chief Financial Officer, Jeff McDowall in an internal document to senior leaders highlighted the aim. McDowall clarified that the work doesn't involve a company-wide restructure. "Our aim is to deliver meaningful, sustainable reductions in our overhead cost base. We are targeting a reduction of five per cent in addition to the normal annual cost efficiencies that are necessary to offset the impact of inflation." McDowall said the project will run for no longer than three months. Through this, Air New Zealand expects to have a set of clear initiatives that are ready to be implemented. "This cost transformation is a pivotal step towards improving our profitability, so its imperative we are all aligned on what is required and work together to make the right decisions, and trade-offs, for both our people and Air New Zealand as a whole."

The airline also plans to grow its network between three per cent and five per cent a year on average for the next year years, down from a forecast five per cent to seven per cent.