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100 jobs for the axe at Air NZ subsidiary

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Tue, 16 Feb 2010 11:03a.m.

100 jobs look to be axed at the Air New Zealand subsidiary

100 jobs look to be axed at the Air New Zealand subsidiary

Around 100 jobs are up for the axe at Air New Zealand engineering subsidiary Safe Air in Blenheim.

Air New Zealand group general manager technical operations Vanessa Stoddart said consultation began with staff this morning on reducing the workforce of 351 by around 100 positions.

The cuts were a result of over 18 months of delays in the delivery of Royal New Zealand Air Force C130 aircraft for major upgrade work under the contract with Canadian company, SPAR Aerospace, she said.

The lead contractor in the C130 overhaul programme, SPAR notified Safe Air of an indefinite postponement to the programme on December 21.

SPAR in conjunction with the Ministry of Defence awarded Safe Air the contract in 2005 to carry out the work on four RNZAF C130 aircraft.

As a result Safe Air increased its workforce and made significant investments in equipment and facilities for the planned arrival of the first aircraft in August 2008, Ms Stoddart said.

Work to be carried out by Safe Air included major structural refurbishments, such as the replacement of the centre wing, as well as modifications to major avionics systems, including installation of a new "glass" flight deck, navigation and communication suites and night vision.

"We were advised of successive delays for the scheduled arrival of the first aircraft culminating in the advice in December that the first aircraft was delayed indefinitely."

She said the company had worked hard to mitigate the impact of this lengthy delay through generating additional work for Safe Air, including transferring Air New Zealand aircraft maintenance to Blenheim to keep staff employed while awaiting the arrival of these military aircraft..

"However, due to the uncertainty of work in the pipeline created by the SPAR notification, we have now reached the point where we need to reduce the workforce by around 100 people. If we don't make this tough move, Safe Air will incur significant losses that would put the jobs of the remaining workforce in jeopardy."

A final decision on the exact number of job losses was expected next month.

NZPA

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Comments

18 Feb 2010 12:40p.m.

Craig wrote:

Perhaps you need to go to commercial law school lightseed as you clearly only got half the picture... A subsidiary, in business matters, is an entity that is controlled by a separate higher entity.(note AIR NEW ZEALAND probably don't completely own it) The most common way that control of a subsidiary, is achieved is through the ownership of shares in the subsidiary. These shares give the major shareholder the necessary votes to determine the composition of the board of the subsidiary, and so exercise control. This gives rise to the common presumption that 50% plus one share is enough to create a subsidiary. so in simple terms that you MAY understand, safe air was probably and maybe still a privately owned company that AIR NEW ZEALAND brought controlling shares in and there is probably other investors involved. AIR NEW ZEALAND don't own SPAR so you think in this foreseen scenario they would have tied a cancellation agreement into the contract, thus probably why SPAR have come to the party claiming to be delayed indefinitely on the first aircraft and not claimed to cancel the deal. that should confuse your simple little mind for a while.

18 Feb 2010 10:15a.m.

Lightseed wrote:

Graig, the ballsup is you haven't understood the article. Safe Air is owned by Air NZ, who have been keeping the people employed without work for quite a while. So take your Air NZ hatred and go learn the facts.

18 Feb 2010 09:30a.m.

Craig wrote:

what a absolute ballsup on air new zealand and SPAR's behalf surely there must be some sort of penalty clause in the contract between SPAR and air new zealand where safe air could recoup some of it costs for this bungled deal, knowing AIR NEW ZEALAND MANAGEMENT TEAM probaly not.