Air NZ may sue Qantas

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Air New Zealand is threatening to sue Qantas to recover millions of dollars of costs incurred last year when the Australian carrier's engineers went on wild-cat strikes.

The 10-week-long stand-off between Qantas and its licensed aircraft engineers ended last July but its impact was felt for months afterwards because of the backlog of work it created. The industrial dispute was hugely damaging for Qantas's reputation, causing a many flight cancellations and other scheduling problems over several months.

Air New Zealand, one of Qantas's biggest customers, had to relocate some of its own engineers to Australia for more than eight months to work on its aircraft because of the dispute. The last remaining engineers returned home only two months ago.

Air New Zealand's Australian general manager, John Harrison, said the airline would make a final decision on whether to take legal action against Qantas within the next week. "We are considering what to do with Qantas [in the recovery of costs] and that includes the option of legal action."

Although Air New Zealand was exempt from paying some of the charges under its engineering contract with Qantas, the savings did not cover the total cost of relocating engineers, which included paying allowances and accommodating them here.

Mr Harrison declined to reveal the cost of the dispute but said it was "fairly substantial". The Herald understands the costs reached into millions of dollars.

Air New Zealand and other airlines also bore the brunt of a wild-cat strike by Qantas baggage handlers at Australian airports in March to protest at the loss of at least 120 jobs through outsourcing. Air New Zealand had to accommodate hundreds of passengers who missed connecting flights and had to deal with mishandled bags.