AIR - Air NZ.

[Cyclical]

Please bear with me and I will keep things brief (ish)

Very insightful post, thanks for sharing. I was wondering if there might be some employees out there reading this thread and thinking some of us are pretty ruthless in our thinking...me included TBH. All we really want is for a healthy, competitive and sustainable company out the other side of it though. Having said that, really sorry to hear of your own position and hope that things look up for you soon.

[BlackPeter]

https://www.nzherald.co.nz/business/...ectid=12333532

Union's and staff appear to have no understanding of the business or the rate at which it is burning through cash. You'd be forgiven for thinking the unions want the consultation process to drag on almost endlessly.

With a little bit of luck they kill off Air New Zealand (as they did with Ansett New Zealand) and AIR might have a chance to rise after bankruptcy proceedings like Phoenix from the ashes. Only problem is - I suppose the government will prefer to appease the unions and pay ad infinitum. Hey - it is only our money, isn't it?

{Edit:}

Just (after writing and posting above) I came across Chinese Kiwis outstanding and in depth post, which shows clearly a different perspective. It indicates that the fault is not just on the side of the unions, but that it was the company who started (and probably greatly contributed) to this mess.

I do feel for any front line staff who is now loosing their job due to no fault of their own.

I still don't think that anybody will gain through endless legal battles and delays ... but I acknowledge that the people who suffer most have the least responsibility for this mess. This is just sad.

ChineseKiwi - sad to hear about your redundancy and all the best for the future. I am sure the sun will shine again.

[samjaynz]

ChineseKiwi - sorry to hear about your redundancy. I hope you and your family are OK and you find new work or new opportunities. A close friend of my wife's lost her job with Air NZ yesterday too ... very gutted about it as she loved her work.

[RGR367]

Please bear with me and I will keep things brief (ish)

.............
My disclosure:

I was but am no longer a shareholder in ANZ
I was made redundant by them yesterday.
It's been my beloved career and I mourn it deeply.
Life goes on.

Sorry to hear about your redundancy. But yeah, life goes on and that's the spirit. And hopefully someday soon you'll be treating this redundancy too as a blessing in disguise. Good luck Chinesekiwi.

[Beagle]

Please bear with me and I will keep things brief (ish)

I can say that the Union and the company both have very clear understandings of what is transpiring and what the end game will be - as do the staff.

Staff, in this case older wide body Long Haul crew, are very aware of how this business runs - it may suprise people just how heavily invested staff are in this company, the sense of pride and ownership should be very evident and to boot there are a whole lot of employee/shareholders in this company.

Being an employee/worker doesn't preclude one from being a shareholder and Air NZ has a large number of employee shareholders (not via incentive schemes and the like). They are not mutually exclusive.

In essence the issue of the protracted wrangling over redundancies is simple and here it is.

In 2014 (or 13) Air NZ threatened the union with outsourcing its entire wide body crew resource. So essentially all crew were to disestablished and those who accepted new contracts with vastly reduced term/ conditions and salaries would be taken back on. The company stated it wanted $6 million PA from the workers.

Essentially a massive 6 million dollar a year transfer of wealth (wages) from workers to shareholders (dividends) - don't get me wrong I owned plenty of shares over these years.

In order to avoid outsourcing the Union agreed to Air NZ's second plan which was to keep all wide body Long Haul existing crew (to which the then new CEO Christopher Luxon famously stated were legacies of the past) on their current contracts but in order to keep that they needed to agree that any new crew member employed forthwith would go onto a new schedule contract - the same vastly reduced terms and conditions and salary as originally proposed in the outsource proposal. The poison was swallowed.

The two groups would be kept separate, The existing crew would operate only on 777 200 and 777 300 aircraft and the new crew group would operate exclusively on the new 787 aircraft. Both crew groups would have vastly different contracts with the contract for each crew group running to 169 pages and within those 169 page contracts were multiple sub clauses affecting different ranks - believe me it was and is a deeply detailed document.

The issue has now arisen whereby some 1500 or so crew need to be put off yet the contracts Air NZ and the Union at the time have now proven to be unbelievably contradictory and almost impossible to reconcile. You can drive a very very wide bus through the loopholes and now you have multiple groups and ranks within groups at each others throats defending their legal interpretations of why their group must remain and another group be made redundant.

The Union itself (though this union ETU inherited the bulk content of these contracts from the previous union FARSA) is at high risk of being sued by it's constituent member groups who have lawyered up. The Union like the company is completely tied in legal knots and QC's are now involved - this is a case where the company got too clever in 2014 and tore the crew apart and put in place what they thought were smart contracts.

The price they pay now for getting those annual $6m wage savings is the pain now that all suffer with these convoluted and completely contradictory contracts - I have seen them they are utterly open to challenge on so many levels and are in fact the subject of three legal challenges and more to come.

It is not the the company, the union or the staff are necessarily slowing things down it is a function of god awful contracts.

However this week the redundancy calls are being made en masse and the company has acceptable that the inevitable post redundancy legal challenges will roll in.

My disclosure:

I was but am no longer a shareholder in ANZ
I was made redundant by them yesterday.
It's been my beloved career and I mourn it deeply.
Life goes on.

Thank you for your insights. I feel very sorry for you. Best wishes.

[iceman]

Thank you for your insights. I feel very sorry for you. Best wishes.

Ditto. A very good post Chinesekiwi and I also feel sorry for your circumstances. Have a friend in the same situation as of yesterday.

[winner69]

From Salt FundsvApril report

As just one example, Air NZ (AIR, +58.2%) spiked on a retail investor driven surge, which almost appeared to be driven by a misunderstanding that the Government is bailing them out as suggested by a prominent radio host. Two of the more prominent DIY retail brokers accounted for one third of all turnover and almost all the net buying at one stage during the month.

Our take on the sombre reality is that this fine airline will survive and perhaps even prosper again in the future but current equity holders may own little of it when it does. No business with high fixed costs can survive a sudden cessation in revenue for long. AIR is burning cash faster than jet fuel and its formerly permanent positive working capital difference is falling sharply as ticket refunds and credits have to be issued. AIR also has significant out of the money oil hedges. Put this together and the onerous Government debt package must surely have a high likelihood of being converted into equity, heavily diluting current holders. The share price may come under pressure as this possibility becomes more obvious.

[Cyclical]

From Salt FundsvApril report

As just one example, Air NZ (AIR, +58.2%) spiked on a retail investor driven surge, which almost appeared to be driven by a misunderstanding that the Government is bailing them out as suggested by a prominent radio host. Two of the more prominent DIY retail brokers accounted for one third of all turnover and almost all the net buying at one stage during the month.

Our take on the sombre reality is that this fine airline will survive and perhaps even prosper again in the future but current equity holders may own little of it when it does. No business with high fixed costs can survive a sudden cessation in revenue for long. AIR is burning cash faster than jet fuel and its formerly permanent positive working capital difference is falling sharply as ticket refunds and credits have to be issued. AIR also has significant out of the money oil hedges. Put this together and the onerous Government debt package must surely have a high likelihood of being converted into equity, heavily diluting current holders. The share price may come under pressure as this possibility becomes more obvious.

Thanks winner. The highlighted bit has been obvious to a lot of us for several weeks now, and yet she's still cruising at ($1)25 thousand feet. I feel for these "retail investors" that are surely about to learn a harsh lesson.

[Beagle]

Now, there is something I never expected to read.

https://www.nzherald.co.nz/business/...ectid=12333425
"Qantas and Jetstar will give masks to all passengers and implement other measures but will no longer leave an empty seat between passengers to provide a level of social distancing on board. The airline says it is impractical, unnecessary and would result in higher airfares. And Qantas boss Alan Joyce says the 60cm gap achieved by a leaving the middle seat empty is token social distancing at great economic cost".

Hmmm...I don't like the way they have unilaterally decided that with no consultation with N.Z. authorities.
For the foreseeable future...If I can't comfortably drive there in my own car, I'm not going, simple as that.

[dobby41]

https://www.nzherald.co.nz/business/...ectid=12333425
"Qantas and Jetstar will give masks to all passengers and implement other measures but will no longer leave an empty seat between passengers to provide a level of social distancing on board. The airline says it is impractical, unnecessary and would result in higher airfares. And Qantas boss Alan Joyce says the 60cm gap achieved by a leaving the middle seat empty is token social distancing at great economic cost".

Hmmm...I don't like the way they have unilaterally decided that with no consultation with N.Z. authorities.
For the foreseeable future...If I can't comfortably drive there in my own car, I'm not going, simple as that.

Certainly the 60cm gap isn't the 1m they want so is it worth it?
Seems a bit token to me.