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Air NZ - Privatisation By Stealth?

Air NZ - Privatisation By Stealth?

Air NZ is preparing to outsource more than half its Finance Department to take advantage of cheaper labour overseas, with Fiji as the most likely option.

New Zealand's national airline is also engaged in consultation with the Service and Food Workers Union Nga Ringa Tota (SFWU) and the Engineering, Printing and Manufacturing Union (EPMU) to find a "competitive in-house solution" to avoid tendering out all Air NZ ground-staff employees at the airports.

SFWU Northern Region Secretary Jill Ovens says the two processes follow hot on the heels of attempts to outsource the company's heavy engineering services - avoided only by unions agreeing to cuts in staff numbers and reductions in conditions.

She says the latest moves appear to be part of a general plan to divest itself of its employees and operations, possibly to make the 80% publicly owned Air NZ shares more attractive to private buyers.

"The airline is making a profit and recently announced that it is on target with its profit estimate for the 2006 financial year.

"There is no crisis in Air NZ. This is simply a drive for bigger profits for a minority of private shareholders in order that the company can convince the Government to relinquish the Kiwi share."

Air NZ plans to shed more than half its finance department (53% of the employees) over one year. The remaining employees would be training the staff of the outsource provider who will be based off-shore, most likely in Fiji where clerical workers are paid as little as $6000 a year. Other possibilities include India or the Philippines.

Once they are trained, the New Zealand workforce would be made redundant.

"It is stated in the collective employment agreement that the company has a preference for employing its own employees, but Air NZ management tell us that this must be balanced against strategic objectives to reduce costs."

Ms Ovens says the company has as one of its values "Uniquely Kiwi" and yet very soon, our national airline is going to consist of a few select corporate managers maintaining the Koru brand, and some directly-employed airline pilots.

"They seem to be modelling themselves on multi-national corporations where highly paid corporate managers simply manage third-party contracts in Third World countries, rather than employ their own employees," she says.

"If Air NZ follows through on its plans, the finance operation will be performed by staff off-shore, and ground staff wearing the Air NZ uniform will be employed by contractors."

The union is planning a public campaign, including picketing Air NZ CEO Rob Fyfe's offices, in opposition to outsourcing its members in Air NZ Finance.

"The NZ public is the majority shareholder of this airline. Rob Fyfe and his corporate heads are chipping away at our airline bit by bit. It doesn't belong to them to sell it off like this."

Ms Ovens says Air NZ recently showcased some new marketing, using the words: "Ko matou enei", meaning "It's who we are."

"If the majority of Air NZ employees are contracted out, or their work is outsourced to workers off-shore, how can the company honestly use this slogan?"


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