AIAL starts redundancy talks after passenger numbers dive 95%

24th April 2020 By Staff Reporter | news@tourismticker.com | @tourismticker

Auckland Airport has started consultation with permanent staff about reducing numbers following the release of 105 fixed term and independent contractors.

Operator Auckland International Airport Limited said it had been “materially impacted” by the Covid-19 pandemic and was now operating at about 10% of its capacity. It employed 632 staff and had taken $4.3m from the Government’s wage subsidy scheme.

Adrian Littlewood

“This is a difficult day for our organisation,” Chief executive Adrian Littlewood said yesterday in an update to the NZX.

“Only weeks ago, our team was charging ahead with our infrastructure development programme that included transformational projects that we were all proud to be leading.

“Covid-19 has had a profound impact on aviation and our tourism industry, and like many other organisations we are now having to make changes that would have seemed unimaginable only months ago.”

International passenger numbers for the first 20 days of April was down 95.3% on the same period last year and the downturn was expected to continue, with fewer repatriation services expected in the weeks ahead. For all of April last year, the airport reported 872,997 international passenger movements, excluding transits.

“The picture is still emerging and while we are hopeful of borders opening up across the Tasman, the reality is it may take some time for people to begin travelling internationally again,” Littlewood said.

“In the near term, the restart of our business is likely to be a much smaller, domestic-focused operation.”

The number of Auckland Airport employees had grown by 40% over the past 18 months to support the company’s $2bn infrastructure development programme but most of that work had now been mothballed.

“It’s been extremely tough on everyone in the team to see progress stall, but with our revenue streams materially impacted and no certainty about the future, we have had to move quickly to cut costs,” Littlewood said.

The company had also cut remuneration for its board directors and leadership team by 20%, lowered employee salary/hours by 20%, and downsized outsourced contracts. It had also deferred pay increases for some employees and cut all discretionary spending.

“Despite all of these measures, we have now reached the point where we need to reshape our organisation in line with a much smaller capital programme as well as our expectations for materially lower international passenger numbers for the foreseeable future,” Littlewood said.

“We are committed to supporting our people as we go through this process over the coming weeks, as we work to understand what the future holds for Auckland Airport and what that means for the shape of our organisation.”

Before the Covid-19 pandemic, 29 airlines were operating at the airport but that had now dropped to 11, with the number of daily flights falling from 500 to 80.