Aviation experts say it is hardly surprising that Air New Zealand's reviewing its long-haul flight services.
The national carrier's losing $1 million a week on its long-haul network, including its daily services to London. Flights via Hong Kong and Los Angeles to London suffer huge fuel charges.
The airline wants to lift its annual profit by $110 million by 2015.
It posted a six-month loss of $37 million to the end of June following disruption to flights from earthquakes in Canterbury and Japan.
In a letter to staff last week, obtained by the Dominion Post, Air New Zealand chief executive Rob Fyfe said the company had to be prepared "to make some tough choices”.
"We need to reduce our costs to reflect the lower level of demand for air travel that we are likely to see in the coming 12 months and the increasing price competition as our competitors struggle to fill their aircraft."
It is understood all departments have also been told to shed budgets by 10 percent.
He said the company was holding a review to consider how to cut costs and boost income, and no part of the airline was safe, the Business Day website reports.
"There are no sacred cows," Mr Fyfe wrote.
Findings from the review are expected to be known in March 2012. However, there are rumours this afternoon will see a meeting between management and redundancies made to the supply chain.
An Air New Zealand spokesman said the company was not considering pulling out of London.
However, Mr Fyfe says Air New Zealand is looking to make changes to its sales and marketing teams in the United States and Britain to generate more revenue in those markets.
Job cuts there and at the airline's head office could number in the low hundreds, Business Day reports.
Aviation commentator Peter Clark says it is a tough time for airlines but it is not all doom and gloom.
“Air New Zealand is working very hard to survive,” he says. “We’ve seen that with its operations going with Virgin and buying a share of Virgin Airlines in Australian. The Trans-Tasman, they’re working very hard and doing well on that and into Pacific Islands.”
Their stocks fell as low as 91 cents on Monday, bringing its decline this year to 39 per cent, having traded at $1.53 in January. Air NZ shares fell to their lowest level since mid-2009.
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