This means that service cancellations and the move to smaller aircraft previously announced for May and June have been extended to incorporate the months of July, August and September, and some new cancellations have been introduced to Singapore and Taipei services.

These changes represent a further 2% reduction in total available capacity across the airline's international network (as measured in available seats per kilometre) for the end of the 2003 financial period. The capacity reductions for May - September 2003 represent 8% of the total available international capacity for this period.

Air New Zealand's Managing Director and CEO, Ralph Norris emphasised that this move was a prudent business response to a clearly changed air travel environment due to SARS.

"While we are optimistic that the public's confidence in flying to Asian destinations will be restored over time, this recent decision is designed to reduce costs by more efficiently utilising our aircraft, as well as providing more clarity to our customers planning travel in the next few months, and more certainty for our staff."

"As this move signals a longer term reduction in services, we have closely looked at our resource needs for the period, and are confident that we have the ability to implement a number of staffing options - none of which necessitate redundancies at this point."

"These options cover a range of accepted HR practices including staff leave options, reducing overtime and a freeze on recruitment."

"Bookings on our Los Angeles and London sectors remain strong, and our domestic, trans-Tasman and Cargo operations are essentially unaffected by SARS," said Mr Norris.

Air New Zealand has deferred the introduction of an additional Boeing 767-300 aircraft planned for December 2003, but remains committed to the introduction of its new A320 fleet.

For some routes such as Hong Kong and Taiwan, the current adjustments to
Air New Zealand's international schedule are in many cases returning to capacity levels provided by the airline at the same time last year.

Percentage capacity reduction on a route by route basis are:

Destination May June July August September
Hong Kong 39% 33% 29% 26% 30%
Singapore 0% 23% 16% 13% 17%
Taiwan 0% 16% 15% 38% 31%
Japan 16% 39% 23% 19% 21%
Total International 7% 11% 7% 6% 7%

 

The current global airline industry environment remains extremely volatile.
Air New Zealand will continue to monitor events and booking profiles and will advise the market if this results in a significant change in its current forecast for the 2003 financial year of profit before unusuals and tax of $200 million.

NOTE: The content of all Air New Zealand media releases are accurate at the time of issue, as stated at the top of each release. For updates on any changes, please contact Air New Zealand.

Air New Zealand is proud to be a member of Star Alliance. The Star Alliance network was established in 1997 as the first truly global airline alliance to offer worldwide reach, recognition and seamless service to the international traveller. Its acceptance by the market has been recognised by numerous awards, including the Air Transport World Market Leadership Award, Best Airline Alliance by both Business Traveller Magazine and Skytrax. The member airlines are: Adria Airways, Air Canada, Air China, Air New Zealand, ANA, Asiana Airlines, Austrian, Blue1, bmi, Continental Airlines, Croatia Airlines, EGYPTAIR, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shanghai Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, Turkish Airlines, THAI, United and US Airways. Aegean Airlines, Air India, Brussels Airlines and TAM have been announced as future members. Overall, the Star Alliance network offers 19,500 daily flights to 1,071 airports in 171 countries.

For more information about Air New Zealand visit www.airnewzealand.com and for more information about Star Alliance visit www.staralliance.com.