A global economic slowdown hit transport firms yesterday, forcing Neptune Orient Lines (NOL) to cut about 1,000 jobs and Air New Zealand to eliminate 200, the companies said.
Global container shipping and logistics firm NOL said it is dealing with an “unprecedented” industry downturn while the airline blamed a significant drop in tourism.
Most of the NOL jobs will be lost in North America, where the company’s costs are highest, the Singapore-based firm said.
It describes itself as the largest shipping line in Southeast Asia, and seventh-largest in the world, with a current global workforce of more than 11,000 people.
NOL spokesman Paul Barrett said details of how many jobs would be lost in the US have not been finalized. Staff will also be cut in Asia and Europe where “other restructuring” will occur as well, he said.
About 50 jobs are expected to disappear in Singapore, NOL said.
The cuts come after NOL last month said it would reduce capacity between Asia and Europe by close to 25 percent, and 20 percent on the trans-Pacific route.
Those cuts will save the company about US$200 million but the market has worsened considerably over the past month, the company said in a statement, forecasting a “grim” outlook for profitability next year.
“The negative conditions we are seeing in the marketplace are unprecedented in our industry’s history. This necessitates these very difficult decisions,” NOL’s group president and chief executive officer Ron Widdows said. “This reflects our considered view that what we are seeing goes beyond a normal cyclical downturn.”
Neptune Orient Lines is the parent company of container shipping line APL, which is based in Oakland, California. NOL Group’s American regional headquarters will move from Oakland to a more cost-effective location elsewhere in the US, NOL said.
NOL last month reported third-quarter net profit plunged 82 percent. Net profit for the three months to September was US$35 million, down from US$191 million in the same period last year because of falling demand.
New Zealand’s flag carrier airline said it was aiming to save NZ$20 million (US$11 million) annually by cutting the 200 fulltime jobs, most of which would be voluntary, chief executive Rob Fyfe said.
“We’ve seen a very significant downturn in inbound tourism into New Zealand which started 12 months ago and has accelerated in the last six months,” he told commercial television.
“That’s resulted in us reducing our long-haul capacity in particular,” he said.
The airline is shedding up to 100 long-haul cabin crew positions, and most of the rest are in technical jobs, he said.
Statistics New Zealand said late last month that visitor arrivals fell 7 percent in September, compared with the same month last year.
Airline industry analysts have warned that Asian carriers face bleak times ahead, partly from slowing travel demand during the global economic crisis. Some airlines are at risk of failure, they say.
In the shipping sector, container shippers, bulk operators and port authorities across Asia are all reporting slowdowns in business.
“The excess of supply in vessels has worsened as growth in commodities demand has slowed, in line with the global economic downturn, the freezing in credit, lower consumption in the US and Europe, and volatility in currency and other financial markets,” Moody’s Investors Service said in a report this week.