All international and domestic flights from Australian Qantas Airways (photo) are grounded a labour dispute, a decision which the airline said would cost Aus$20m a day.
Immediately after the announcement 600 flights were cancelled, affecting 70,000 travelers according to the airline.
On Saturday, the airline’s chief executive Alan Joyce held a press conference in Sydney during which he announced that all aircraft would remain grounded indefinitely until unions representing pilots and ground staff reached an agreement with Qantas over pay and work conditions.
Mr Joyce said he made the decision early Saturday and then obtained the approval of the Qantas board.
“The airline will be grounded as long as it takes to reach a conclusion on this”, he said.
He warned that he would not take “the easy way out” and agree to union demands, arguing that it “would destroy Qantas in the long term”.
“I’m actually taking the bold decision, an unbelievable decision, a very hard decision, to ground this airline.”
“We are locking out until the unions withdraw their extreme claim and reach an agreement with us,” Mr Joyce said. “This is the fastest way to ensure the airline gets back in the air.”
In a statement Qantas said all employees involved in industrial action would be locked out from Monday evening and flights grounded from 06:00 GMT on Saturday.
“Pilots, licensed engineers and baggage, ground and catering staff are essential to Qantas operations and the lockout will therefore make it necessary for all Qantas aircraft to be grounded,” the airline said.
All aircrafts currently in the air will complete their flights but there won’t be any other departures.
The airline’s fleet of 108 aircraft will be grounded in 22 airports around the world.
According to Qantas in the next 24 hours 13,305 passengers were booked to travel on its planes from overseas airports to Australia. The airline added that about 1,310 international passengers may currently be at international airports, waiting for their flights to depart.
On its Facebook page Qantas issued a statement telling customers booked on the airline’s flights not to go the airport until further notice.
It also said that it would offer hotel accomodation and alternative flights to those who are mid-journey when the grounding takes effect and that a full refund would be available to passengers whose flights have been canceled.
Last August the airline announced plans for restructuring and moving some operations to Asia, which led to deteriorated relations between the unions and Qantas management.
A series of costly strikes have forced the airline to reduce and reschedule flights for weeks because of the dispute, which Qantas says is costing Aus$15m a week.
Although it has a 65% share of the domestic Australian market, Qantas has been making heavy losses on its international flights.
Of Qantas 35,000-strong workforce, the restructuring is expected to mean the loss of 1,000 jobs.
The grounding of Qantas entire fleet was criticised by labor unions.
The lack of notice drew sharp criticism from a spokesman for the Australian Workers’ Union, one of the country’s oldest and largest unions with more than 135,000 members.
“Words can’t express our anger at the unilateral decision Qantas management has taken — as well as the impact it will have on all Qantas workers and the thousands of travelers now left stranded in Australia and around the world,” the national secretary of the group, Paul Howes, said.
“Unions rightly give 72 hours notice before industrial action, but Qantas management has given no notice before this wildcat grounding of their fleet,” he said, in a statement on the union’s Web site.
Barry Jackson of the Australian and International Pilots Association told Sky News : “It’s unprecedented and really it has hijacked the nation. It really has put everyone on notice and… it’s forcing the government’s hand on this.”
“We really need to address this sooner rather than later and get the aircraft back in the air.”
Fair Work Australia
The Australian government also reacted to the grounding.
In Perth, the country’s prime minister Julia Gillard told reporters : “The Qantas dispute escalated today and I am concerned about that for the national economy … it could have implications for our national economy.”
The government will take action to intervene in the dispute, said Australian minister for transport, Anthony Albanese.
“We are very concerned about Qantas’ actions, of which we were notified only mid-afternoon, with no advance notice from Qantas at any stage,” he said.
“The government is making an urgent application to Fair Work Australia to terminate all industrial action at Qantas. This will be aimed at both actions by unions and by Qantas management.”
Fair Work Australia, the national industrial tribunal, has the power to suspend or terminate industrial action.The hearing into the dispute started on Saturday night.
The three-person panel is expected to hear evidence from Qantas.