Ups and downs: the job market for airline workers

By MATHEW DEARNALEY

The last time Qantas pitched for a share of Air New Zealand, it was boldly predicting good times ahead for local aviation workers.

Sydney aviation consultant Ian Oldmeadow dangled the bright job prospects at unions representing maintenance engineers and cabin crew at softening-up briefings in Auckland and Wellington last winter.

Several months later, he was again acting for Qantas. This time, however, he was warning Australian price-control regulators of 200,000 job losses in a global aviation industry already in trouble before the September 11 terrorist attacks sent it into a tailspin.

Qantas is being more guarded about its renewed ownership bid, leaving it to Air NZ to phone the Engineering, Printing and Manufacturing Union with an indication of even more work than flagged last year.

The Labour-affiliated EPMU appears convinced, but leaders of other aviation unions - arguably with more to lose if Qantas gains too much control of the national carrier - suspect they are being lured into a trap.

Air NZ engineers are already doing considerable work for Qantas, offering a fast, high-quality service at lower cost than available in Australia, and those opposing the deal say they have little more to gain from cross-ownership.

Engineers in Auckland have recently started reconfiguring cabins and installing inflight entertainment systems in Qantas Boeing 747-400 aircraft, under a $13.5 million to $16 million contract signed between the airlines in May for up to 15 planes.

EPMU national secretary Andrew Little says Qantas was "amazed" by a reported 10-day turnaround time for a programme of deep-maintenance checks compared with 17 days across the Tasman.

While job losses continue elsewhere in Air NZ - domestic flight attendants, for instance, are being squeezed out of the new meal-free Express service - the airline is advertising for about 150 more aircraft engineers.

Almost half its engineering work is already for outside clients, including Northern Hemisphere airlines, and it hopes to sign a long-term contract soon for maintenance already begun on Virgin Blue aircraft flying Australian domestic routes in competition with Qantas.

Air NZ has even had to turn down work this year. It was unable to fit one job from South America into a schedule which includes servicing gas-turbine engines for power generation under a $180 million contract with the giant El Paso Corporation of the United States.

But some engineers are attracted to the idea of a servicing alliance with Qantas to ensure long-term continuity of work, and Little is not afraid to stick his head above the parapets to support the idea of selling up to a quarter of Air NZ to the Australian airline.

He acknowledges that the New Zealand carrier's character and identity may suffer if this exceeds 25 per cent, but shares Treasurer Michael Cullen's apparent fear that it could be demolished if a jilted Qantas launches a head-to-head fare war.

"I personally doubt that Air NZ could survive a wholesale onslaught," he says, adding that he believes a public eager for better health services would be loath to see the Government pump in any more capital after its $885 million bailout of the airline last year.

Little is buoyed by Oldmeadow's indication that engineering jobs would be secured in a strategic relationship between the airlines, probably through the development of specialised "centres of excellence" on each side of the Tasman.

Unions report no visits by lobbyists this time, but Air NZ was quick to phone Little's staff with an even more bullish employment forecast after noting comments he made to the Herald a fortnight ago about a likely division of labour.

His understanding after Oldmeadow's visit was that all Boeing 767s from the Qantas and Air NZ fleets would be serviced in New Zealand, leaving Australian engineers with their Boeing 747s and new Airbus planes.

But he says the Air NZ messenger has since suggested to the union that Qantas would look at sending Airbus maintenance New Zealand's way as well, while the respective 737 fleets would be shared.

This follows Air NZ's decision to buy or lease 15 new European-made Airbus 150-seat A320s for US$400 million ($887 million), with 10-year purchase rights for 20 more, a move hailed by market analysts as a sign of improving health.

Qantas is another new Airbus customer with orders for 13 larger A330s and plans to buy 31 of its other models, including 12 of the proposed double-decker, 550-seater A380s, between 2006 and 2011.

While these would give New Zealanders plenty of work, not all engineers are won over.

One sceptic is George Ryde, new secretary of the Aviation and Marine Engineers' Union and former president of the International Transport Federation aviation section.

Although Ryde is confident Qantas will not try to close engineering bases in New Zealand as long as their costs are lower than in Australia, he has reservations about the "centres of excellence" concept.

He notes that Air NZ draws business from throughout the world specifically because its engineers have the licences and skills to work on virtually any aircraft type.

His worry, therefore, is that making the business more specialised and losing such a mainstay as the 747 jumbos to Australia would "deskill" New Zealand engineers and weaken their attraction to other operators.

The EPMU's senior delegate at Air NZ's Auckland engineering base, Jim Jackson, says his members treasure their international reputation for servicing Boeings but having the chance to work on Airbus planes would make up for losing 747s. "It would add a second string to our bow."

Ryde wonders whether the Airbus manufacturing consortium may be tempted to buy vacant facilities in Australia to set up its own engineering base for servicing its new clients on both sides of the Tasman.

But his biggest worry is the integrity of Air NZ as a whole, as a national carrier committed to serving this country rather than funnelling tourists to Australia.

"I think everyone worries about getting the run-around from the Aussies - there is the fear that Air NZ will become a domestic feeder to the kangaroo."

It is understood that Oldmeadow may have fed that fear in discussions with another union, the Flight Attendants and Related Services Association.

One source said he told the union Air NZ would retain its separate identity but there would be a division of routes by which it would become a secondary carrier operating as a feeder to Qantas on routes too "thin" for the Australian airline's jumbos.

At the same time, he is said to have assured the union that there would be plenty of work for New Zealand cabin crew.

He could not be contacted to confirm this. A staff member of Oldmeadow Consulting referred a Herald inquiry to a Qantas media officer, who did not return calls.

Neither would union executive director Terry Law discuss what he called a private briefing, but he said his members strongly supported retaining a New Zealand-owned national carrier "which has a special place in New Zealanders' hearts".

"Flight attendants are intensely proud of their airline and want to retain their status."

Law's members face some job losses from Air NZ's stripped-down new domestic service, although mainly by attrition and nothing as deep as the 17 per cent cut already made to management ranks.

The airline expects 200 redundancies from doing away with meals and simplifying booking, but Law is uncertain how many will be cabin crew and hopes enough will be retained in anticipation of strong customer demand for more flights.

He notes that the airline is rebuilding the frequency of some international routes, including to Los Angeles and Hong Kong, because of a faster-than-expected industry recovery.

An Air NZ spokesman said 9672 people worked for the airline and its subsidiary operations, including budget carrier Freedom Air, compared with 10,914 last September.

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