Qantas has ended its industrial dispute with aircraft engineers after both parties agreed to a 3 per cent annual wage increase for the next three years. However, the other demands of the Australian Licenced Aircraft Engineers Association (ALAEA) such as the construction of a new engineering hangar, was rejected.

With the agreement, which ALAEA has not officially confirmed, there is less thorn on the side of Qantas whose labor row with pilots and ground crew is now with Fair Work Australia (FWA).

"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," Qantas said in a statement on Monday.

The company said it would submit an agreed workplace determination to FWA which Qantas said is a good deal both for the air carrier and the 1,600 licenced engineers who belong to ALAEA.

Despite the end of Qantas's labor dispute with ALAEA, Chief Executive Alan Joyce said the company is preparing itself for another tough year in 2012.

"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," The Australian quoted Mr Joyce.

He pointed out that it is Qantas's ability to be pliant and adjust such as the natural calamities and industrial actions that hit the flag carrier that it was able to cope with these unexpected events.

Among the things that Mr Joyce would have the flexibility to respond to is the upcoming lease renewal of 43 aircraft in the next three years and the retirement of 16 jets, granting him the wider latitude whether to cut back or expand operations.

Qantas will also have to make a decision on 15 Jetstar 787-8 jets due for delivery in 2013 and 35 more 787-9 aircraft which are initially planned to be split between Jetstar and a new premium airline based in southeast Asia to protect the company's investment grade credit rating.

Besides the option not to take the aircraft, late deliveries would mean that the manufacturer could not impose cancellation penalties on Qantas.

Instead of Qantas operating the planned new premium airline, reports said the firm is now studying the possibility of entering into a joint venture with Malaysia Airlines-Air Asia. Qantas is also scheduled to enter into a joint venture with Japan Airlines, starting with three jets which would grow to 24 aircraft, and lead to new alliances.

Mr Joyce hinted of more partnership announcements in 2012 such as with British Airways, which like Qantas is also strike-prone, the launch of new first-class and premium lounges in Los Angeles, Hong Kong and Singapore, and enhancements to Qantas's frequent flyer program.