ANZ Posts Record Loss Of USD$583million

Thu Nov 01, 2001 1:35 am

Air New Zealand faces a shrinking future after reporting a record full year loss of NZD$1.4 billion (USD$583 million).

The airline, which came close to collapse, is experiencing a drop in passenger demand and says the outlook is uncertain.

The carrier wrote off its NZD$1.3 billion in failed Australian airline Ansett. Reduced demand and last month's collapse of Ansett means the carrier must shrink its network to a sustainable core to survive.

"Redundancies will inevitably occur," said Air New Zealand. It has already announced that 800 workers are to go from its 9000-strong workforce.

Last week it pruned senior management by half and sliced 15 percent from executive salaries.

The struggling carrier also has unveiled cuts to international flight schedules for the Northern Hemisphere winter and cutbacks and fare increases on routes between New Zealand and Australia.

The changes follow a NZD$885 million Government rescue package last month which returns the carrier to 83 percent state ownership.

Singapore Airlines with a 4.2 percent holding and Singapore-based Brierley Investments with 5.3 percent, are Air New Zealand's other major shareholders.