Air New Zealand faces job cut pressure after slashing 5% of flights

Air New Zealand is preparing for a difficult second half of the year, warning that more flights could be cut and jobs may disappear as soaring fuel prices and weakening travel demand place mounting pressure on the airline’s finances, as reported by Rnz.

Nikhil Ravishankar, chief executive, stated the carrier has already reduced around 5% of its flights following the sharp rise in jet fuel costs triggered by the conflict involving Iran. But the airline now expects deeper adjustments after the July school holidays, particularly across long-haul international services.

The company is forecasting a full-year pre-tax loss between $340 million and $390 million, a stark reflection of how quickly operating conditions have deteriorated for airlines globally.

Speaking on Thursday, Ravishankar mentioned, demand for domestic travel had already begun to soften before geopolitical tensions intensified. The rising cost of living, combined with higher airfares, has started to affect how much passengers are willing to spend.

“Cost-of-living challenges are real,” he said, noting that customers were showing signs of resistance to further fare increases.

Rather than scrapping routes entirely, the airline plans to reduce flight frequencies. In practical terms, destinations currently served twice daily may soon see only one service, with midday and non-peak flights most likely to disappear.

International services are expected to bear the brunt of the cuts between August and October, while regional and domestic routes are likely to see fewer disruptions. 

Customers are expected to receive further details in June.

One casualty of the airline’s revised strategy is its planned London service, which will no longer launch next year as originally intended.

Behind the scenes, Air New Zealand is also reviewing internal spending as it attempts to weather what Ravishankar described as an unprecedented fuel crisis. The airline is considering cuts to non-frontline roles while protecting operations directly linked to customer service and safety.

“We are paying over double what we normally pay for fuel,” he said. “Recovery will have a long tail.”

Despite the financial strain, Ravishankar insisted the airline remained focused on maintaining safe and reliable services, while stripping away costs the business can temporarily operate without.

For many travellers, the changes could mean fewer choices, longer wait times between flights and higher fares during peak periods. For employees, uncertainty is growing as the airline weighs workforce reductions alongside operational cuts.

Yet Ravishankar struck a note of confidence about the airline’s future, describing Air New Zealand as one of the country’s most respected and iconic brands.

“This is one hell of an airline,” he said. “The plans that we have in place ensure New Zealand has a world-class airline into the future.”