Airport Services Update

11 October 2006

Airport Services Update

Air New Zealand has been advised by unions that they want to enter a 58 day consultation process over the future direction of its Airport Services division.

Airport Services is the part of Air New Zealand that manages processes ranging from check-in to tarmac operations and loading luggage for Air New Zealand and many other airlines in New Zealand.

It employs 1675 full and part-time staff based at Auckland, Wellington and Christchurch airports.

Group General Manager People Vanessa Stoddart says the Airport Services business is currently facing severe challenges.

“We have been working with staff representatives for many months to explore ways of improving the competitiveness of Airport Services and to reduce the loss of third party work as other airlines operating in New Zealand move to other suppliers. To date the speed of progress made has not been sufficient,” says Ms Stoddart.

“In the past two weeks, our second largest airline customer here in New Zealand has terminated their contract, because they perceive that Air New Zealand can no longer provide a competitive service. The loss of that contract could jeopardise approximately 160 Airport Services jobs.”

On Thursday last week the airline met with union leaders to outline the scale and urgency of the problem.

“The meeting was an opportunity to impress on them that if we can’t rapidly address the uncompetitive issues in our business, Airport Services will continue to lose customers and scale, and will struggle to remain viable.

“A key issue for Airport Services remains its current lack of flexibility to meet customer needs due to restrictive work practices,” Ms Stoddart says.

The union leaders were offered the opportunity to assist Air New Zealand in finding an urgent solution to the problem.

Their response has been to advise the airline today that the company should commence a formal 58 day consultation process in order to resolve the future direction of Airport Services.

“We will now reflect on the union’s perspective and expect to advise staff of next steps by the end of the week,” said Ms Stoddart.

“Nevertheless, in the event that we can’t develop a market competitive in-house solution, which is our strong preference, Air New Zealand will be forced to look to a third party airport services provider to deliver this service, just as all other airlines flying into and out of New Zealand do.”

If Air New Zealand proceeds with an outsource of Airport Services, it would expect the new provider to employ most of the existing staff with more flexible terms and conditions.

ENDS

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