web analytics

Fyfe’s model for the future

Written By: - Date published: 10:23 am, May 13th, 2009 - 9 comments
Categories: wages, workers' rights - Tags:

Despite four days of strike action and growing public outrage over Air New Zealand’s treatment of its Zeal320 flight attendants, CEO Rob Fyfe is still refusing to even start closing the glaring pay gap between these workers and those employed directly by AirNZ.

Why is Fyfe willing to force these workers into even more strike action, damage the company’s brand and leave even more planes sitting on the ground rather than just giving the Zeal320 staff a completely fair pay rise? There’s only 240 of them. Their claims for this round could probably be settled for as little as $6000 each, a step towards pay parity with people doing the same job as them. $1.5 million. It’s nothing to a company that had $4.2 billion in revenue last year.

Fyfe could literally give up his pay rise for one year to solve this dispute. So why is he willing to take so much punishment to stop the flight attendants getting a pay rise?

Because Zeal320 is Fyfe’s model for the future.

Right now most flight attendants are employed directly by AirNZ and get paid much better than people doing the same job who are employed by Zeal320. The 1000 flight attendants employed by AirNZ directly get something like $20,000 a year on average more than their Zeal320 colleagues.

What would happen if Fyfe could get all the flight attendants on to Zeal320 wages? By attrition and redundancies get rid of the flight attendants who are directly employed by AirNZ and replace them with workers employed on Zeal320 wages. Now you’re talking serious money – $20 million a year in reduced wages.

That’s what Fyfe is really fighting for. Not over a puny $1.5 million but because if Zeal320 workers get on track to pay parity with other flight attendants the chance to screw all flight attendants will be lost. And after them, the rest of the AirNZ workforce.

We all saw what Fyfe did in Air NZ Engineering and in Airport Services, his model is to cut and outsource until there’s nothing left. And judging by his 93% pay rise last year, enrich himself in the process. Is this really the business model we want for an iconic company that is 80% owned by the public?

9 comments on “Fyfe’s model for the future ”

  1. It could go bankrupt while Jetstar, Pacific Blue and Emirates pillage it across the Tasman and on longhaul with a higher cost structure, or it could have been 49% owned by Singapore Airlines had a certain Finance Minister found that not to his taste.

    Qantas faces the same challenge, its staff are well paid, and it has set up Jetstar to undercut that on routes with low premium traffic. Most NZ routes have low premium traffic.

    Or do you know better how to make an airline a positive net investment when there are less than 5 investment grade airlines in the world today? (pre recession)? If you don’t, then why not sell it and not expose taxpayers to the risk.

    • burt 1.1

      I agree – sell it. The govt is elected by the people to govern – not play at being in business using our money with zero accountability.

      The desire to have a “National carrier” is driven by Ego & emotion. Ego & emotion cost money.

    • Eddie 1.2

      We wouldn’t have flights to regional airports if Singapore Air had bought it instead of the government.

  2. burt 2


    I regularly grumble about MP’s pay rises far exceeding the average ‘workers’ pay rise. I’ve been complaining about his stuff for years. The more myopic and partisan hacks who comment on the standard (claiming to represent workers rights) defended the PM’s circa 9% every year while workers only got 3% by saying that the PM didn’t set her own pay rise.

    Applying that logic: Did Fyfe set his own pay rise or did the majority shareholder (last year when 93% was awarded it was Labour) vote for this payrise ?

    Did Labour reward him for his good work putting a dividend on their investment ahead of workers rights?

    Looks like you are confused again Eddie – I think it’s Labour’s model for the future but I hope National can sort it out. What is the biggest evil Eddie – Having these 200 odd employees move to a 90 day probation period working for Air NZ (The National party model) or having them work via an off shore company (The Labour party model)?

    • Maynard J 2.1

      Genuinely confused here: where does the ‘offshore comany – Labour Party model’ come from? There is no explanation for that comment.

  3. itbit 3

    Fyfe was “awarded” his $1.5 million payrise from profit margins and performance for the year 2007/2008. We all know how he did it. Air New Zealands revenue from cargo alone was $3 billion for the year ending 2008.

    Fyfe’s a very good business man. I’m sure he’s not without his morals. Once upon a time I even had respect for him.

    Not any more.

    If it’s Labours Model For the Future why exactly are the National Government allowing it to continue? This whole thing really only became an issue after the Zeal320 AOC was absorbed back into Air New Zealand and the Zeal/Freedom Contract expired. In late November/early December. The AOC was the last thing remaining of Freedom Air/Zeal320 before the cabin crew to be absorbed back into the parent company. Zeal320 was, until then, a wholly owned Subsidary AIRLINE of Air New Zealand. Now it is, for lack of a better description, a shell company which the only reason I can see for exsisting is to keep wages as low as possible.

    Another point Libertyscott….if Air New Zealand want their fares to stack up against Jetstar and Pac Blue perhaps they should be offering the same standard of service with the same non existant seat space. They have (I believe) 172-180 seats on their (Jetstar) A320’s and (Pac Blue) Boeing 737’s. The seats on the Air NZ A320’s is 152, including Business. To be fair, the expectation that their fares should be as competitive with the budget Airlines is non sense. They offer in Premium Business Class a service with a Chef designed menu, very roomy seating in suede and leather and a 10″ screen with a wide selection of fodder for the travellers viewing/listening pleasure. In Premium Economy and Pacific Class they still have a larger seat pitch than both Jetstar and Pac Blue, a meal for every passenger (you should see the amount of unused meals/juices/splits/food and drink in general that is biffed due to MAF regulations-COST COST COST, they burn the money spent on all that wasted food every time they land and are re-catered) and an 8″ screen with the same selection of veiwing/listening fodder as Premium. The food and drink is all complimetary, as is the $60million entertainment and interior upgrade. As I’m sure you are all aware, on Pac Blue and Jetstar you either pay or starve and you have a deck of cards for entertainment (not that thats not sufficient for many, I’m sure). If you want to stack up the extra costs for all the extra nicks and nacks Air NZ has kindly put in place for it’s valued customers to travel across the ditch as opposed to the service and comfort levels offered by the budget Airlines I’m sure you will see that Air New Zealand are slightly out of touch with their expectations. Their savings of approx 1.5million PA (more than the total pay increase being asked for by the crew) is a very little drop in the large pool of spending that Air New Zealand has done in their commitment to passenger comfort and satisfaction. If they want to pay their crew less than the budget airlines pay theirs, they should be doing a budget service. They would save a shit load more money that way and then they might actually be competitive. I applaud them for wanting to make it seem like Air NZ is so much more wonderful than everyone else in the commitment to their passengers. They just do it by paying the people charged with looking after them a lot less than they like you to think.

    Oh, and one more. To be an Airline you need a few BASIC things.

    1. Aircraft-no brainer, right?
    2. Pilots-or the planes aren’t flying aywhere
    3. Engineers-or the planes might fly a couple of sectors, but after that you’re fadged
    4. Cabin Crew-without these guys all you’re gunna do is carry cargo

    Yes, it’s that simple. Of course you need all the money and the gadgets and the other bit and bobs but without these FOUR things, you are not a passenger Airline. I would say that makes the cabin crew’s job fairly important. Just thought I’d remind you of that.

    Eddie, I agree with you. It took 6 months for Air New Zealand to agree to specify Aircraft type on a draft contract, this was what first aroused my suspicion. The contract was, of course, to be renewed/renegotiated in 15 months. It makes sense as far as cost savings for Air NZ to do this to their employees. So I laugh at other Air NZ employees who shun and write off the Zeal Crew for being (Fyfe’s words, not mine) “disenchanted” with Air New Zealand’s brand and the almighty Koru. Coz guess what? Your job is next, buddy. And if Zeal weren’t sticking up for their rights as well as your’s, sure as shit no one else will be.

    Burt, I know this is what one might coin a “political” blog, but get another bloody hobby. As much as I am sure that to a certain extent, this may be politically motivated and it’s all the Government’s (past and present) fault for allowing it to happen, ultimately Fyfe is running the show the majority of the time. For me, it is he who is accountable. And I don’t really give a shit if Andrew Little or the EPMU are getting air time and kudos from their respective party for all this hoo hah, or that the timing seems off to you, as long as Zeal are negotiated a better deal. The’re might be a whole lot of stuff going on that none of us know about and we can theorize until we’re blue in the face but what matters is that Air New Zealand quit being such pricks, pull finger, stop making the public “disenchanted” with their precious image and get this sorted so these people can just do their jobs.

    Once upon a time I respected Rob Fyfe and Air New Zealand. I wanted to work for them because of their reputation and what they represented as New Zealanders.

    But not anymore.

  4. The Voice of Reason 4

    Burt: The majority shareholder (not a political party, but the government in its wider sense) would not have voted on Fyfe’s appalling pay rise. That would have been a matter for the remuneration committee of the board or some similar mechanism at board level to authorise.

    While the gov’t has the shares, it does not have control over the day to day management of the company. It can make changes to the board if it does not like the boards’ decisions, but it cannot change the decisions.

    So Fyfe is free to keep sucking pig feed from the trough as long is he enjoys the confidence of the board. Which no doubt he does, as the board are likely to be as deep in the swill as he is.

    ps Why do Air NZ need wide body jets? So Rob Fyfe has somewhere to keep his wallet. Boom boom!

  5. Eddie said “We wouldn’t have flights to regional airports if Singapore Air had bought it instead of the government” nonsense, most of those are quite high yielding as NZ has a monopoly on them.

    Itbit: Yes fair point, NZ’s tasman business model has blurred a bit. I have no problem with Zeal staff having a go at increasing their wages, although have to argue worst possible timing, in mid recession. I wont fly Jetstar or Pacific Blue because I find low cost airlines just unpleasant, and I’m NZ Gold Elite because generally I get a good product.

    However, it shouldn’t be a political decision, but business decisions by the airline and employees about what each is prepared to take. Sadly it affects the taxpayer because it is lumped with the airline because of past poor decisions by government and previous boards.

    • itbit 5.1

      Yes it is. So hence I’m saying for them to expect that their ticket prices should be competitive with the budget airlines is just a little too optimistic. There have been many, many emails to Rob Fyfe in support of the crew and some even specify that they are happy to pay extra to fly with Air New Zealand because of the meals/drinks/TV/service. He always gives the same answer: “Perhaps you are but many travellers are not willing to do so, especially in these economic times.”

      They were driving down ticket prices long before the recession was ever metioned. They must have been raking in the cash. And the crew were still on the same wage.

      I suppose then you might call it bad luck that the contract expired and the opportunity came up to negotiate a better deal in the middle of a recession? Recession though it may be, Air New Zealand is still profitable, the business is not just the Airline alone. The majority of their revenue is not even generated by ticket sales so to place such emphasis on this as an excuse to keep these people below a budget airline wage is pathetic in the least.

      It might be bad timing but I suppose they could have just renewed it for 15 months and tried to renegotiate then. But whose to say the recession would be over by then? Perhaps it might have deepened? So when would be the “best time” for the crew to do this?

      If there was no recesson would you fully support these crew in their actions?

Recent Comments

Recent Posts

  • Put our most vulnerable first
    Don’t forget whānau and communities most at risk, says the Green Party, as the Government lays out its three-phase plan for Omicron. ...
    13 hours ago
  • Boosting our immunity against Omicron
    With Omicron in the community, it’s vital we all do our bit to help to slow the spread, keep each other safe and protect our health system. One of the most important ways we can reduce the risk of Omicron is to get a booster dose as soon as we’re ...
    19 hours ago
  • Equitable response to Omicron vital
    The Green Party supports the Government’s decision to move Aotearoa New Zealand to traffic light level Red at 11.59pm tonight, but says its success will depend on the support that is made available to the most vulnerable. ...
    4 days ago
  • How we’re preparing for Omicron
    As countries around the world experience Omicron outbreaks, we’re taking steps now to ensure we’re as prepared as possible and our communities are protected. ...
    7 days ago
  • What’s Labour achieved so far?
    Quite a bit! This Government was elected to take on the toughest issues facing Aotearoa – and that’s what we’re doing. Since the start of the pandemic, protecting lives and livelihoods has been a priority, but we’ve also made progress on long-term challenges, to deliver a future the next generation ...
    2 weeks ago
  • Tackling the big issues in 2022
    This year, keeping Kiwis safe from COVID will remain a key priority of the Government – but we’re also pushing ahead on some of New Zealand’s biggest long-term challenges. In 2022, we’re working to get more Kiwis into homes, reduce emissions, lift children out of poverty, and ensure people get ...
    2 weeks ago

  • Government announces three phase public health response to Omicron
    Reducing isolation period for cases and close contacts at Phase Two and Three to 10 and seven days Definition of close contact required to isolate changes to household or household like contacts at Phase Three Increased use of rapid antigen tests with test to return policy put in place for ...
    BeehiveBy beehive.govt.nz
    16 hours ago
  • New Ambassador to Thailand announced
    Foreign Affairs Minister Nanaia Mahuta today announced the appointment of Jonathan Kings as New Zealand’s next Ambassador to Thailand. “Aotearoa New Zealand has a long-standing relationship with Thailand, celebrating the 65th anniversary of diplomatic representation between our countries in 2021. We also share much in common at regional and multilateral levels ...
    BeehiveBy beehive.govt.nz
    19 hours ago
  • Government’s Family Package continues to deliver for New Zealanders
    The Families Package helped around 330,000 families in its first year - more than half of all families with children in NZ These families received an estimated $55 per week more from Families Package payments in 2018/19 than in 2017/18, on average Families Package increases to the maximum possible Accommodation ...
    BeehiveBy beehive.govt.nz
    21 hours ago
  • New Zealand retains top spot in global anti-corruption rankings
    Justice Minister Kris Faafoi has welcomed news of New Zealand’s ongoing position as top in the world anti-corruption rankings. The 2021 Corruption Perceptions Index released by global anti-corruption organisation, Transparency International, ranks New Zealand first equal with Denmark and Finland, with a score of 88 out of 100. “This is an ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Testing improvements see New Zealand well prepared for Omicron
    New Zealand’s PCR testing capacity can be increased by nearly 20,000 tests per day to deal with a surge in cases as part of our wider COVID-19 testing strategy, Associate Minister of Health Dr Ayesha Verrall said. “We have continued to adapt our public health response to safeguard the health ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • 5,000 portable air cleaners for schools on their way
    As schools are preparing to return, Education Minister Chris Hipkins has announced 5,000 air cleaners have been ordered for New Zealand schools. “As we know, along with vaccination, testing, good hygiene and physical distancing, good ventilation is important in minimising the risk of airborne transmission of the virus that causes ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Zealand to move to Red from 11.59pm today
    All of New Zealand will move to the Red setting of the Covid Protection Framework (CPF) at 11:59pm today as Omicron is potentially now transmitting in the community, Prime Minister Jacinda Ardern says. “Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region are now confirmed as Omicron, and a further ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Mandatory boosters for key workforces progressing well
    More than 5,785 (82%) border workers eligible for a booster vaccination at 6 months have received it so far, COVID-19 Response Minister Chris Hipkins says. “That’s a really strong uptake considering we announced the requirement the week before Christmas, but we need to continue this momentum,” Chris Hipkins said. “We ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • NZ to move to Red
    Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region have now been confirmed as the Omicron variant, and a further case from the same household was confirmed late yesterday. These cases are in a single family that flew to Auckland on 13 January to attend a wedding and other events ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New Zealand to provide further help for Tonga
    Aotearoa New Zealand is giving an additional $2 million in humanitarian funding for Tonga as the country recovers from a volcanic eruption and tsunami last weekend, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. This brings Aotearoa New Zealand’s contribution to $3 million. “This support will ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Quarterly benefit numbers show highest number of exits into work
    The Government’s strong focus on supporting more people into work is reflected in benefit figures released today which show a year-on-year fall of around 21,300 people receiving a main benefit in the December 2021 quarter, Minister for Social Development and Employment Carmel Sepuloni said. “Our response to COVID has helped ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Northland to move to Orange, NZ prepared for Omicron 
    Northland to move to Orange Rest of New Zealand stays at Orange in preparedness for Omicron All of New Zealand to move into Red in the event of Omicron community outbreak – no use of lockdowns Govt planning well advanced – new case management, close contact definition and testing rules ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • RNZAF C-130 Hercules flight departs for Tonga as Navy vessels draw nearer to Tongatapu
    A Royal New Zealand Air Force C-130 Hercules has departed Base Auckland Whenuapai for Tonga carrying aid supplies, as the New Zealand aid effort ramps up, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “The aircraft is carrying humanitarian aid and disaster relief supplies, including water ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • New Zealand prepared to send support to Tonga
    New Zealand is ready to assist Tonga in its recovery from Saturday night’s undersea eruption and tsunami, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “Following the successful surveillance and reconnaissance flight of a New Zealand P-3K2 Orion on Monday, imagery and details have been sent ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Aotearoa New Zealand stands ready to assist people of Tonga
    The thoughts of New Zealanders are with the people of Tonga following yesterday’s undersea volcanic eruption and subsequent tsunami waves, Foreign Affairs Minister Nanaia Mahuta says. “Damage assessments are under way and New Zealand has formally offered to provide assistance to Tonga,” said Nanaia Mahuta. New Zealand has made an ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Record high of new homes consented continues
    In the year ended November 2021, 48,522 new homes were consented, up 26 per cent from the November 2020 year. In November 2021, 4,688 new dwellings were consented. Auckland’s new homes consented numbers rose 25 per cent in the last year. Annual figures for the last nine months show more ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Report trumpets scope for ice cream exports
    Latest research into our premium ice cream industry suggests exporters could find new buyers in valuable overseas markets as consumers increasingly look for tip top quality in food. Economic Development Minister Stuart Nash has released a new report for the Food and Beverage Information Project. The project is run by ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Honouring the legacy of legendary kaumātua Muriwai Ihakara
    Associate Minister for Arts, Culture, and Heritage Kiri Allan expressed her great sadness and deepest condolences at the passing of esteemed kaumātua, Muriwai Ihakara. “Muriwai’s passing is not only a loss for the wider creative sector but for all of Aotearoa New Zealand. The country has lost a much beloved ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Have your say on proposed changes to make drinking water safer
    Associate Minister for the Environment Kiri Allan is urging all New Zealanders to give feedback on proposed changes aimed at making drinking water safer. “The current regulations are not fit for purpose and don’t offer enough protection, particularly for those whose water comes from smaller supplies,” Kiri Allan said. “This ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Planting the seeds for rewarding careers
    A boost in funding for a number of Jobs for Nature initiatives across Canterbury will provide sustainable employment opportunities for more than 70 people, Conservation Minister Kiri Allan says. “The six projects are diverse, ranging from establishing coastline trapping in Kaikōura, to setting up a native plant nursery, restoration planting ...
    BeehiveBy beehive.govt.nz
    3 weeks ago
  • New Zealand congratulates Tonga's new Prime Minister on appointment
    Minister of Foreign Affairs Nanaia Mahuta today congratulated Hon Hu'akavameiliku Siaosi Sovaleni on being appointed Prime Minister of the Kingdom of Tonga. “Aotearoa New Zealand and Tonga have an enduring bond and the Kingdom is one of our closest neighbours in the Pacific. We look forward to working with Prime ...
    BeehiveBy beehive.govt.nz
    3 weeks ago