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Qantas grounds entire fleet amid industrial dispute

30 october 2011, 10:18
Australian flag carrier Qantas on Saturday took the drastic step of grounding its entire fleet indefinitely in an escalating industrial dispute that sparked travel chaos for passengers around the world, AFP reports.

The airline, which has been hit by a series of strikes, said all employees involved in the action would be locked out from Monday evening without pay and flights grounded from 0600 GMT Saturday.

"We have decided to ground the Qantas international and domestic fleets immediately," chief executive Alan Joyce said in a hastily announced press conference that surprised and angered the government.

The airline said pilots, engineers and baggage, ground and catering staff involved in the industrial action were essential to Qantas operations and their lockout made it necessary to take all planes out of service immediately.

Joyce said the airline would remain grounded "as long as it takes to reach a conclusion on this" and vowed not to bow to union demands.

"That would destroy Qantas in the long term," he said.

"I'm actually taking the bold decision, an unbelievable decision, a very hard decision, to ground this airline."

Australian Prime Minister Julia Gillard immediately intervened, taking the rare step of asking the industrial regulator to terminate the strike action because of the dangers it was now posing to the national economy.

Canberra can get involved in industrial disputes if the economy or the welfare of Australia's population is deemed to to be under threat.

"I believe Australians want to see this sorted out. Businesses want to see it sorted out. Passengers want to see it sorted out. I want to see this dispute sorted out. That's why we have approached Fair Work Australia," she said.

Fair Work Australia was holding a late-night hearing on the issue in Melbourne. In its submission to the regulator, the government asked for the industrial action to be terminated or suspended for 90 days.

Unions have been protesting against pay and restructuring plans that would see 1,000 jobs axed and the establishment of two new airlines focused on Asia. Unions fear many jobs will be outsourced to Asia.

The months of strikes by baggage handlers, engineers and pilots have been costing Qantas Aus$15 million (US$16 million) per week, with the total financial impact so far hitting Aus$68 million.

They have also been throwing people's travel plans into chaos, a situation magnified by Saturday's shock decision.

Qantas said grounding the entire fleet affected 108 planes at 22 airports, with passengers across Australia as well as in regional hubs such as Singapore, Hong Kong and Bangkok feeling the impact.

The grounding of the fleet came a day after a heated annual general meeting, with Joyce being accused of running the carrier into the ground while reaping massive personal rewards.

Engineering union chief Steve Purvinas had warned that protests could stretch until mid-2012 while ground staff leader Tony Sheldon threatened crippling 48-hour strikes.

Australian pilots Saturday said Qantas was "holding a knife to the nation's throat" and called for Joyce to be sacked immediately.

"This is a stunning overreaction. It is straight-up blackmail," said Australian and International Pilots Association vice-president Richard Woodward.

"This is a grave and serious situation and the board should move to sack Mr Joyce immediately."

But Joyce blasted the unions for running "utterly destructive industrial campaigns against Qantas and our customers, hurting all our employees and undermining Australian business".

"They are trashing our strategy and our brand," he said, adding that company research showed an alarming increase in people who intended not to fly with Qantas.

The airline will offer hotel accommodation and alternative flights to those who are mid-journey and cannot get home because of the grounding.

By Amy Coopes

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