Wellington - Air New Zealand welcomed Friday a government report clearing it of accusations that it illegally underpaid Chinese flight attendants on its Shanghai-Auckland services rates.

The Department of Labour report, which followed claims the airline operated a "flying sweat shop," confirmed it met legal requirements when establishing its Chinese cabin crew base in Shanghai, Ed Sims, the long haul group general manager, said.

He said the report showed that criticism of the airline, which is 76-per-cent state-owned, for paying the crew rates below New Zealand's legal minimum wage, was unfounded.

Sims said the department found that the crew was employed under Chinese law and the airline was not legally obliged to employ staff offshore under New Zealand conditions.

He said all foreign airlines were required to work through a Chinese government agency when recruiting staff in China and salaries were agreed in conjunction with the agency and were in line with other airlines operating Shanghai crew bases.

"The salaries reflect local market relativities, as do the salaries for all our staff in off-shore locations," Sims said. (dpa)