Air NZ has recently posted a $138 million profit, successfully turning around losses of $1 million a week in its international airline with its award winning financial strategies, innovative marketing and outstanding service. It now forecasts that it will double that profit in the next financial year, and is offering an attractive investment for the sale of shares in the near future.
Air NZ’s Domestic and International flight attendants are a unionised workforce, and 95% of them belong to the Flight Attendants and Related Services Association (FARSA). FARSA has for many years achieved and protected reasonable pay scales and working conditions that allow adequate rest and recovery from the rigours of shift work, time zone changes and aircraft pressure differentials for its members.
Air NZ owns a subsidiary company called Air NZ Tasman Pacific Ltd which is an employment contracting company. TasPac (as it is known) employs flight attendants to operate trans Tasman and Pacific island routes. These flight attendants also have a heavy union density with the members belonging to two separate unions, the EPMU and FARSA.
The terms and conditions under which the Tasman Pacific crew work are significantly less than their colleagues at Air NZ and it is generally accepted that the conditions they work under are more arduous because they do not have the historical protections that Air NZ crew have negotiated over the years into their CEA. The rest and recovery provisions which have been developed over the last 40 years by FARSA to ensure the safety of the travelling public, do not apply in TasPac.
On 17 April 2013 Air NZ (as part of their ‘Go Beyond’ strategy) announced “Project Choice” as a way to reduce the labour costs of the flight attendant workforce by 20%. The method being used is to shift the work to another company (Tasman Pacific) as part of the group and advise workers that they can choose to have a job with that entity. This deliberately places staff in an insecure position. If staff stay with Air New Zealand under the collective agreement they risk being made redundant in the future. If they choose to go to Tasman Pacific then they lose their current entitlements.
No redundancy package is being offered to Domestic or International flight attendants, but no permanent appointments will be made into those divisions in the future, so through natural attrition they will gradually over time disappear. It is likely that at some stage those who remain will be forced to move to the new division or leave, as the short-haul and long-haul work will no longer be viable for the airline to continue running.
There was no consultation with the unions prior to the announcement of Project Choice as required both by law and by the terms of the employment contracts agreed within the last few months. One of the contracts had been ratified as recently as March 2013, yet no indication was given of the looming introduction of Project Choice. The rate of implementation for Project Choice has been so rapid that flight attendants are being asked to make significant and hasty decisions about their futures based on very little information. Apart from some generic FAQs, there was little information upon which to make decisions and no copy of the contract the crew would be working under at [the as yet unnamed new division] was available before the closing date.
Staff at TasPac are being offered exciting new ‘opportunities’ at the new wide body division, and many of them are signing up for the new destinations and the glamour of being an ‘international flight attendant’. Air NZ is exploiting their enthusiasm, inexperience and lack of knowledge to drive down the working conditions for the whole industry in New Zealand.
Air NZ has a reputation for outstanding safety and service and should be proud to recognise its staff with fair and reasonable wages and conditions. It should be holding them up as an inspiration to the rest of the industry to aspire to, not dragging them down to the lowest common denominator in the quest for bigger profits, while customers see no reduction in the fares that they are charged. If the airline is allowed to push this through in direct contradiction of the objects of the Employment Relations Act, other corporates will surely do the same in their industries and New Zealand’s economy will suffer as a result.