SINGAPORE, November 19 – A global economic slowdown hit transport firms on Wednesday, 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, said the Singapore-based firm.
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 told AFP details of how many jobs would be lost in the United States have not been finalised. 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 200 million US dollars but the market has worsened considerably over the past month, the company said in a statement, forecasting a "grim" outlook for profitability in 2009.
"The negative conditions we are seeing in the marketplace are unprecedented in our industry\’s history. This necessitates these very difficult decisions," said NOL\’s group president and chief executive officer Ron Widdows.
"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, based in Oakland, California. NOL Group\’s American regional headquarters will move from Oakland to a more cost-effective location elsewhere in the United States, NOL said.
NOL last month reported third-quarter net profit plunged 82 percent. Net profit for the three months to September was 35 million US dollars, down from 191 million in the same period in 2007 because of falling demand.
New Zealand\’s flag carrier airline said it was aiming to save 20 million dollars (11 million US) annually by cutting the 200 full-time 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 to the country fell seven 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 while the global economy contracts.
"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.
Neptune Orient Lines is 66 percent owned by Singapore\’s state-linked investment firm Temasek Holdings.
NOL is the second major Singapore-based firm to announce large job cuts since the economic slowdown began to hit home. Earlier this month DBS Group, Southeast Asia\’s biggest bank by assets, said it was cutting 900 staff.