Former Labor prime minister Paul Keating says the Labor government made a mistake in intervening in the Qantas dispute.

Mr Keating says rather than refer the dispute to Fair Work Australia, he would have let Qantas chief executive Alan Joyce sit there for a week or two.

Outspoken ... Paul Keating Credit:James Alcock

"The chances are there would have been no more Alan Joyce, a very good chance. Having taken his airline out, how was he going to get it back," he told Sky News.

"I think the shareholders would have moved and then the board would have had to do something. The unions on the other hand would have had to do something and we would have had a bargained outcome.