HUNDREDS of Air New Zealand engineering staff will lose their jobs in an outsourcing move which could soon be copied by Qantas.
The Kiwi carrier announced yesterday that it would send all its wide-bodied jet maintenance work to a European contractor after airline workers rejected a deal negotiated by their unions.
The decision came as 3,000 Qantas workers await a decision by the flag carrier's directors on whether their jobs will be kept in Australia.
Qantas chief executive Geoff Dixon warned last week that outsourcing was a high priority because in-house operations were 15 percent to 20 percent below world's best practice.
Yesterday's action by Air NZ came after workers in Auckland and Christchurch rejected union compromises on pay and conditions.
Air NZ decided in December to shift other engineering work overseas to save money, costing about 110 jobs in Auckland.
Before yesterday's announcement, the company had been prepared to keep up to 300 workers in their jobs provided the union deal was accepted.
But after workers' votes taken in Auckland and Christchurch were counted, the carrier said the entire wide-bodied-plane workforce, including 121 licensed engineers, would be retrenched.
The decision would deliver savings of up to $48 million over five years, the company said.
The carrier will retain about 1,500 staff to maintain its Boeing 737 fleet and other smaller aircraft.
Managing director Rob Fyfe said he was ''extremely disappointed'' the unions could not gain support of their members.
''It is unfortunate that many of their members could not accept the need for change even after several months of briefings from company and their own representatives,'' Mr Fyfe said.
The first contracts, involving the carrier's long-haul Boeing 747s and newer 777 aircraft, will go to Europe.
Qantas has deferred a ruling on a jobs move while it reviews several issues, including the outcome of a Howard Government decision on aviation policy that will determine whether Singapore Airlines is allowed to compete on the lucrative U.S. route.
But it has already begun talking to unions about the hard choices they face.
Qantas argues that it has been hamstrung by a lack of flexibility and outmoded work practices while factories in Asia and elsewhere are offering record low prices and competitive turnaround times.
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