Air New Zealand can push ahead with plans to axe 20 jobs in a merger of its aircraft engineering units after a union challenge was unsuccessful.

The airline hopes to save $15.5 million over five years by merging its line maintenance department, which carries out quick checks and maintenance on the tarmac, with its general aircraft maintenance unit.

About 20 line engineers, among about 1300 employees across both units, would lose their jobs under the proposal.

The merger is opposed by the Engineering, Printing and Manufacturing Union and the Aviation and Marine Engineers Association, which have argued that line engineering work is not covered by the collective agreements that cover general engineering staff.


The unions sought an order of compliance from the Employment Relations Authority (ERA) and a permanent injunction preventing Air NZ from proceeding with its restructuring plans.

Air NZ countered that general engineering staff have always carried out at least some of the line engineering work and the merger can go ahead.

In its determination, the ERA found most of Air NZ's line maintenance work was carried out by workers who were covered by the specific line engineering agreement.

But it also found general engineers regularly engaged in line maintenance work as well - an arrangement which was tacitly accepted by all three parties to the dispute.

The ERA rejected the unions' demands, which means Air NZ can push ahead with its proposal.

The proposed merger comes after the airline axed about 400 jobs, mainly in management and support roles, earlier this year.

Air NZ would not comment on the ERA's determination.