Air New Zealand is further reducing capacity across its network. Credit: Lachlan Gatland.

Air New Zealand has announced that it will reduce capacity on domestic and international flights due to the impact of Covid-19 on travel demand.

The airline’s decision follows stringent travel restrictions imposed in New Zealand, which now requires all passengers entering into the country, regardless of citizenship status, to self-isolate for 14 days upon their arrival.

Air New Zealand plans to reduce domestic capacity by 30% in April and May but there are no plans to suspend routes.

The airline’s long-haul travel network capacity will be decreased by 85% over the coming months and the Tasman and Pacific Island network capacity will significantly reduce between April and June.

Flights have been suspended between Auckland and Chicago, San Francisco, Houston, Buenos Aires, Vancouver, Tokyo Narita, Honolulu, Denpasar and Taipei from 30 March to 30 June.

The airline said it is also suspending its London-Los Angeles service from 20 March (ex LAX) and 21 March (ex LHR) through to 30 June.

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The reduction in flights will affect the airline’s 8,000 employees and Air New Zealand’s board of directors agreed to take a 15% pay cut until the end of this calendar year.

Air New Zealand CEO Greg Foran said: “We are now accepting that for the coming months at least Air New Zealand will be a smaller airline requiring fewer resources, including people.

“We have deployed a range of measures such as leave without pay and asking those with excess leave to take it, but these only go so far. We are working on redeployment opportunities for some of our staff within the airline and also to support other organisations.”

The airline has also stopped trading in order to further assess the operational and financial impacts of worldwide travel restrictions.

Air New Zealand operates a global network that offers passenger and cargo services to, from and within New Zealand to 17 million passengers a year.