Air New Zealand (NZ, Auckland Int'l) CEO Greg Foran has told employees that they should brace themselves for further job cuts on top of 4,000 redundancies already announced as it struggles to cut more costs during the Covid-19 era.

The flag carrier needs to reduce its wage bill by a further NZD150 million New Zealand dollars (USD97 million), Foran said in his letter on June 5, the country's 1 NEWS broadcaster reported.

To achieve planned stages to "survive", "revive", and "thrive", the airline will have to implement further cuts, he said.

"We are open to exploring all options with unions that help meet our cost-saving goals, but I do want to be clear that we need to brace ourselves for more discussions around leave without pay, reduced hours, job share, and voluntary exits with redundancies as the last option," he explained.

The downsizing aims to take Air New Zealand through to the announcement of its 2021-2022 annual results in August 2022, with the "revive" phase expected to begin from September.

"We have set the annual results announcement in late August 2022, which is in around 800 days' time, as the target date for Air New Zealand to report we are starting to earn healthy profits again even though we may be at only 70% of our pre-Covid-19 size," Foran said.

The head of aviation at the union E tū, Savage, who goes by only one name, argued that with initial labour cost reductions of around NZD370 million (USD240 million), cuts of a further NZD150 million would only increase the pain for the airline's workers.

"The company is heavily focused on saving money and is in danger of being blinded to the importance of treating both employees and customers with respect," he said, warning that it may use the threat of outsourcing work to downgrade the remaining jobs.

As previously reported, Air New Zealand made cuts to its workforce during May by announcing, on separate days, layoffs of 300 engineering and maintenance workers, 1,300 cabin crew, and three top executives. The remaining executives have taken a 15% pay cut, and the airline has cancelled non-essential spending, eased leasing costs, and modified various supplier terms, Foran said.

The airline is not expecting a return to long-haul routes until 2021. However, its domestic services to Taupo and Timaru resumed on June 8, from Auckland Int'l and Wellington, respectively. The airline now plans to operate around 55% of its pre-Covid domestic capacity during July and August.