Air New Zealand's top executives have chosen to voluntarily freeze their salaries for a year as a cost cutting exercise.

Photo: 123RF

Photo: Supplied / Air New Zealand

In a weekly update to staff, chief executive Christopher Luxon said the "eye watering" increases in jet fuel are having a significant effect on the business, and will cost the airline an extra $200 million this year.

"These are quite eye watering numbers and the executive has been looking at every area of our business for savings to offset these increases as well as hunting out opportunities to increase our revenue from ticket and cargo sales," Mr Luxon said.

The airline plans to reduce overhead costs by five percent, and expects to announce an international partner to run a three-month cost-cuttiong project within the next fortnight.

"As part of that overhead cost review, the executive and I have voluntarily frozen our salaries for at least the next 12 months," said Mr Luxon.