Air New Zealand has outlined a 800 day plan to get back to thriving days. The airline has gone from carrying 18 million passengers annually to a few thousand a day and it’s revenue is down to a fraction from the pre-covid revenue levels of $6 billion.
In an email to its customers the airline’s CEO, Greg Foran, has outlined his vision get back to success levels, delivering top customer service and being a operationally efficient airline.
The mantra is Survive, Revive and then Thrive.
The Survive platform of the airline’s plan is likely to run until the end of August 2020. It’s centred around cutting costs across the business and saying farewell to 4000 Air New Zealanders. Survive is a whole-of-company approach and no area is immune. Air New Zealand has had to start radically overhauling our cost base including grounding the 777 fleet to deferring expenditure on new aircraft, hangers and parking; seeking savings across contracts in our supply chain and leases for aircraft; Executive roles, office space and even company vehicles. The wage bill is down by a third but revenue has fallen by more than two thirds.
Today, the airline has started to remove around $150 million from the wage bill as part of a suite of other changes to our cost base to put Air New Zealand in the shape to be able to meet our 800-day ambition for August 2022.
Air New Zealand will spring into the Revive section of the journey from 1 September, if completed the Survive platform and reduced the cost base to match the much smaller business than pre-COVID-19. Hopefully around this time Tasman and Pacific Island flying could be returning for leisure and business travellers. However, the airline is not factoring a return to long haul flying of any note until next year until there is a vaccine, effective treatment or elimination of the disease in key markets. The New Zealand Government will not fully open its borders for growth in long haul air travel.
Nevertheless, during the Revive period Air New Zealand will be a much smaller airline growing gradually as routes open and customer confidence returns. The airline plans to use this phase to develop new products and services, while creating innovative ways to encourage Kiwis to travel for business and leisure.
Air New Zealand is determined to get through the next 800 days so that by August 2022 it hits the Thrive section. This will be a time where customers, stakeholders, shareholders and all Air New Zealanders will benefit from the hard work and innovation of the Survive and Revive phases of the journey. The focus in the Thrive section will not be on size, but on quality. Air New Zealand will be smaller, flying fewer routes but will not change the outstanding reputation for care, compassion and heart.
Air New Zealand will operate with precision and humanity with the domestic jet and regional operations which are highly efficient and need to be for business customers and the Tasman and Pacific Islands that offers best value option for all customers. International services will be focused on excellent product offering and delivery for business and premium leisure customers. Supported by best in class digital products across all fleets and allowing for seamless customer and staff interaction which improves the experience and reduces costs.
Every airline in the world has been stunned by the COVID-19 pandemic. This event is not a hiccup; very few airlines will return to the former ways of working. The survivors will be more focused, lower cost and provide better customer service.