Air New Zealand plans to axe 1,500 jobs in bid to save millions

State-owned carrier Air New Zealand has announced a cost-cutting plan that will cost 1,500 jobs, including around 300 compulsory redundancies, and save an expected NZ$245m (€124m) annually by 2007.

Savings will be made by a 15% reduction of the 10,000-strong workforce by this date.

Chief executive Ralph Norris stated that the savings and increased revenue, will be as a result of the new four-year business plan that has been approved by the board.

There is also to be increased efficiency in all areas of the business and the introduction of new technology, he said.

Most of the workforce reduction would come through attrition, he added.

The New Zealand government currently owns 82% of Air New Zealand.

Qantas the Australian carrier is seeking to acquire a 22% stake in the airline but the deal has not yet got Australian regulatory approval, while a decision is pending in New Zealand.

Norris said that both he and the board are commited to minimal redundancies and that the job losses would be mainly in the back-office areas.