Air NZ engineers plead for their jobs

Fifteen-year company veteran James Campbell couldn't contain his anger at the engineers' probable axing. Picture / Richard Robinson

Devastated Air New Zealand maintenance engineers will plead for Government intervention to spare more than 600 jobs - most of them in Auckland - on national interest grounds.

The national carrier, of which the Government owns 82 per cent after a $1 billion taxpayer bailout, lifted the axe yesterday over one of New Zealand's most highly skilled workforces in announcing it will outsource heavy maintenance on all its long-haul aircraft.

Subject to consultations with the two engineering unions between now and the week before Christmas, this means the potential loss of 617 jobs out of a maintenance workforce of 2100.

The bulk of the cuts will be in Auckland, where the airline has about 1400 maintenance engineers, but there could also be up to 100 job losses in Christchurch.

Air New Zealand began breaking the news to workers at their Mangere Airport base after warning shareholders at its annual meeting to expect a big tumble in profits this financial year, down to $100 million before tax, from $235 million in 2004-2005.

The company said its heavy maintenance operation, just four years ago regarded as the "jewel in the crown" of what was otherwise a loss-making airline, was now taking big hits from large overseas competitors.

That, compounded by this country's remoteness, meant the high proportion of business formerly propping up the operation from overseas airlines had all but dried up.

Chief executive Rob Fyfe said he was delivering grim news just five days into the job with a "heavy heart. These guys have skills sets that have been invaluable to the airline over the years."

Mr Fyfe said that the airline was competing with large overseas maintenance bases capable of servicing up to 20 jets at a time.

"We are finding that irrespective of the quality of the work, we just do not have the scale to compete with some very large players."

Air New Zealand ventures group general manager Craig Sinclair said sending the airline's wide-bodied jets - Boeing 747s, 767s and 777s - overseas for maintenance would save $100 million over five years.

He said rising cost pressures were masked until 2003 by temporary contracts with Qantas and a relatively low New Zealand dollar.

On top of this was the far lighter maintenance requirement of modern aircraft.

Mr Sinclair said the airline would welcome proposals from unions and staff which might save some jobs or retain more work in New Zealand.

It recognised the announcement would be "unsettling" for staff and their families, and would provide support "should the proposal go ahead".

The unions say the depth of the cuts to a highly skilled workforce, which they warn will be irreplaceable once disbanded, makes it an issue of national interest.

Their immediate goal will be to try to negotiate retention of a contract to strip back and refit the airline's eight Boeing 747s at $20 million a plane, assuring them of another nine months' or so work.

Engineering, Printing and Manufacturing Union secretary Andrew Little said although workers had feared some level of job cuts after consultants spent a year poring over the airline's books, they were stunned to learn how many.

"These people have shown loyalty and dedication to build up a top-quality engineering facility, and they are devastated by the extent of the planned downsizing."

Aviation and Marine Engineers Association general secretary George Ryde said many of those facing redundancy were recent recruits with student loans of up to $40,000.

He called on the Government to waive their loan repayments, at the very least.

A spokeswoman for Finance Minister Michael Cullen said he viewed yesterday's announcement as "entirely a matter for the company".

Workers leaving a meeting late yesterday afternoon where they were told of the likely job cuts were reluctant to comment, because of an employment agreement clause banning them from talking about the company.

But a furious James Campbell, after 15 years' service, could not contain condemnation of management changes which he claimed had ruined a good operation.

He said it had suffered from changes introduced by Mr Sinclair.

Mr Campbell said: "It has gone downhill ever since."

Mr Little said he could not comment until seeing the company's books on workers' suspicions their skills had not been marketed properly. But he said the company should understand workers were "entitled to be angry" and not punish anyone for speaking out.

Mr Ryde said it was "mind-blowing" to see so many security staff and guard dogs around the engineering base, and wondered if the airline did not trust its workers.

"These are loyal employees, some of them with 30 years-plus service. They are responsible aircraft engineers - who do they think these people are?" he said.

The Auckland airport company said the guards were Aviation Security Service employees conducting patrols independently of the airline.