Air NZ 'close' to deal with key union

It emerged that the Engineering, Printing and Manufacturing Union (EPMU), which represents about two-thirds of Air New Zealand's staff affected by the planned outsourcing, had reached an agreement with the airline.

The draft deal would see 40 per cent of the workers get a pay cut while a further 20 per cent of staff would have their pay frozen and about 40 per cent would get varying pay increases.

If finalised, 1,675 check-in staff and loaders would keep their jobs, which were earmarked for outsourcing to Swissport, which is owned by Spanish company Ferrovial.

EPMU national secretary Andrew Little said the new deal, which could save the airline millions of dollars, was not finalised but the union was expected in coming weeks to recommend its members accept it.

"There were some key areas we agreed on, new roster conditions, roster flexibility, changes to pay rates, which meant that for a large section of the workforce their pay rate would fall ... All those people who would suffer a reduction in their base pay rate would be able to take a redundancy," Little said.

The airline has claimed the draft Swissport deal would save it millions of dollars.

"It would have to be pretty close to the $20 million figure," Air New Zealand spokeswoman Pamela Wong said.

But the outsourcing could not go ahead unless another key union, the Service and Food Workers Union (SFWU) also agreed to the deal, said Ms Wong.

The SFWU is believed to represent about 300 staff at the airline whose jobs were in line to be outsourced.

SFWU northern regional secretary Jill Ovens said it was unlikely her members would agree to the deal.

"We don't agree that it is an either/or situation. That you either accept cuts to your pay and conditions or you will be outsourced. We think that it is the union's job to defend our members' terms and conditions," Ovens said.

Ovens said she thought the airline, which is 79.9 per cent government owned, would shy away from outsourcing staff.

"We think that there is considerable public opposition and that the government doesn't want the outsourcing to happen either, so we should hold the line," Ovens said.

New Zealand's Council of Trade Unions (CTU) has weighed in to the dispute.

CTU president Ross Wilson said it would be up to the union members at the airline to decide whether to accept the deal.

Air New Zealand recently announced a half-year profit of $NZ74 million ($A66.4 million), a 61 per cent jump from a year earlier.