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Qantas, engineers reach compromise deal

written by australianaviation.com.au | December 19, 2011

Qantas has reached a labour agreement with the union representing its engineers, but the deal must still be approved by labour umpire Fair Work Australia. (Seth Jaworski)

Qantas and its engineers have reached a contract deal and are expected to present the agreement to labour umpire Fair Work Australia today.

It could still be several weeks before the deal is finalised, but the agreement would end one of the three labour disputes that have badly shaken the carrier this year, leading Qantas management to ground the airline’s entire fleet in late October and costing the company $194 million by its own estimate. Ongoing disputes with unions representing ground staff and long haul pilots are expected to go to binding arbitration next year.

The deal with the Australian Licensed Aircraft Engineers Association (ALAEA) includes a three per cent pay rise in exchange for allowing Qantas to bring in new work practices such as a new license category. The union has also dropped its demand for construction of a new hangar for Airbus A380s that would have allowed heavy maintenance of the jumbo jets to be performed in Australia rather than Asia.

“We will be submitting an agreed workplace determination to Fair Work Australia today that represents a good deal for Qantas and its 1600 licensed engineers,” the airline said in a statement. “It does not include any of the claims that would have restricted Qantas in making the changes needed to compete in the global aviation industry.”

Job security has emerged as the central sticking point in the labour disputes, with unions pushing for guarantees in response to concerns that the airline’s push to expand into Asia will see jobs moved overseas and Australian workers made redundant. Qantas says it will keep jobs in Australia but that it must be free to grow into lucrative developing markets.


The engineers union had been considered the most likely of the three unions to reach an agreement with Qantas. The Australian and International Pilots Association (AIPA), meanwhile, has filed legal action against Fair Work’s order barring all sides from taking industrial action. That case, which could open the way for the pilots to resume industrial action, has been fast tracked in Federal Court and could begin as early as this week.

The vice president of the union, Richard Woodward, today told the Sydney Morning Herald that he remained hopeful a negotiated settlement with Qantas could be reached.

The Transport Workers Union, which represents baggage handlers and other ground staff, is set to see its case go before Fair Work in March.

Meanwhile, Qantas CEO Alan Joyce has continued to express optimism over the airline’s future in a lengthy interview with The Australian.

Qantas profits have been hit hard this year,but Joyce pointed to strong growth in its budget Jetstar subsidiary and its lucrative frequent flyer program, and said the airline was better placed than most to deal with deep economic uncertainty stemming from the debt crisis in Europe.

“You don’t know what’s coming, you don’t know what’s going to hit the airline industry next and if you can’t adjust, be flexible and adapt to it, then I don’t think any airline has the right to survival,” he told The Australian. “And the one great thing Qantas has always had, I think, is that ability. I think it was really put to the test this year with everything that occurred and I think the organisation performed magnificently in being able to cope with the things that were thrown at it.”

In the case of a major economic downturn, Joyce said, the airline would be open to the possibility of scaling back its order for 50 Boeing 787s, which could be cancelled without penalty because of their late delivery. Qantas also has 43 aircraft coming up for lease renewal in the next three years and 16 scheduled retirements, giving it flexibility to either cut back or expand depending on circumstances, Joyce said.

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