Government not stepping into Air NZ dispute, PM says

It is up to unions and Air New Zealand to sort out a dispute over the possible contracting out of 1700 ground staff jobs, Prime Minister Helen Clark says.

Air NZ is seeking to cut costs and has proposed doing that by getting other companies to handle jobs such as baggage handling and check in counters.

Unions oppose the moves and say it would disastrous if it contracted its front counter work to a foreign company.

Labour-affiliated unions put pressure on Government ministers at Labour's conference at the weekend to give the airline a directive to ditch its plans.

Alternatively they said the Government, which owns 80 per cent of the airline, should buy the remaining shares so it could exert greater control.

But Helen Clark today said it was up to unions to put their case to Air NZ.

"It's going to be an issue for the airline and the unions to work through," she said on Newstalk ZB.

When unions had done this earlier this year -- when the airline was planning to move a large number of engineering jobs overseas -- they had been partially successful. That had been done by mounting a strong economic case, she said.

Helen Clark said she understood the unions and the airline were going through a similar process in regard to the latest round of possible job losses.

"It's also understood that the airline has said to the unions that it would like to keep the jobs in-house. That's an expression of interest and I think we should all be working together to get that kind of result."

In February the airline and union members agreed to a proposal, which included contract reforms and the loss of about 200 jobs.

However the deal saved 300 jobs and meant engineering bases at Auckland and Christchurch would remain.

- NZPA