Qantas reaches agreement with engineers' union

The breakthrough was presented to Fair Work Australia, the country's industrial relations umpire, almost two months after Qantas chief Alan Joyce ordered all planes out of the skies.

“After such a damaging industrial campaign, this is a positive outcome that will allow Qantas to move forward with certainty,” Joyce said in a statement, calling it a good deal both for Qantas and the engineers.

“However, it does not contain any of the restrictive demands that would have handed control of parts of the airline to the union.”

The unprecedented shutdown of Qantas followed a fierce backlash from unions concerned at threats to wages and the possible outsourcing of jobs linked to the carrier's plans to establish a premium Asian airline.

With unions representing pilots, engineers and ground staff unable to resolve their disagreements with the airline, and strikes disrupting travelers, Fair Work Australia was ordered in to end the dispute.

Initial talks failed to resolve the issue but both parties have now called a truce ahead of the matter heading into final arbitration, where they would have been bound entirely by a final decision from the industrial umpire.

Steve Purvinas, secretary of the engineer's union, said members had approved a package to last until December 2014 which includes annual pay rises of 3 percent for the 1,600 Qantas engineers.

In a concession, the Australian Licensed Aircraft Engineers Association backed down on a demand that a hangar for heavy maintenance on Airbus A380 double-decker jumbos must be built in Australia instead of in Asia.

“What we wanted was an A380 hangar in this country and we've missed out on that ... but what we have done, we've secured all of our existing job functions in a job security clause which is good news for our members,” Purvinas told national broadcaster the ABC.

While engineers reached an accord, a dispute with the Transport Workers Union and the Australian and International Pilots Association continues and is expected go to arbitration next year, a process which could take months.

Under the arbitration process, unions cannot take industrial action.

Workplace Relations Minister Bill Shorten welcomed the engineers' deal.

“What is important for me here is that you've got two sets of parties who apparently were so unable to agree that Qantas felt the need to ground the airline,” Shorten said.

“What we've seen is, without the resort to arbitration, we've seen the parties actually able to reach an agreement.”

Joyce, who became public enemy number one after the shutdown he ordered stranded thousands of people around the world, said Qantas had always been willing to grant reasonable pay increases and conditions to staff.

But it would not accept union demands over how the airline was run.

“This deal was achievable nine months ago, without the pain for customers and for employees across the wider Qantas business,” Joyce said.

In an interview with The Australian, Joyce added that he expected an announcement on the premium Asian airline, reportedly now more likely to be based in Kuala Lumpur than Singapore, in the first quarter of 2012.

Within five years, the Australian flag carrier wants to have a hub in Asia feeding traffic into the Qantas and budget offshoot Jetstar's networks.

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