A new salary-saving measure has been announced by Air New Zealand to find the way to cope with the recession in the aviation industry without major retrenchment of staff.

For the year starting from the month of July, the salaries of the staff who earn more than $80,000 would be frozen by the airline, a move that will have an effect on around 1000 of the company's 11,000 employees.

It has been learnt that Air New Zealand staff on individual contracts who earning less than $80,000 will be getting only modest salary increases in the next year, starting from July 1.

The staff getting under $50,000 will be limited to an average 2.5% raise; this declines to 2% for those on $50,000-$70,000 and 1% for those earning between $70,000 and $80,000.

Chief executive Rob Fyfe has also said in a memo to staff that on both domestic and international routes, the airline is looking at further reductions in capacity, with an announcement to come in the next couple of weeks.

"With revenue under pressure we must do everything possible to manage our costs. By reducing the amount of flying we are doing, and parking aircraft on the ground, we reduce one of our biggest costs - fuel."

(Via TopNews New Zealand. Contributed by Amiri Halberg)