Strike-hit Qantas grounds its entire fleet, declares lock-out

Qantas Airways today grounded its global fleet indefinitely over labour dispute, a move that would cost the Australian national carrier A$20 million ($21.4 million) a day.

The Australian flag carrier was forced to take action after various employee unions have resorted to strike action since September over pay and Qantas' cost-cutting plans.

The grounding has resulted in thousands of Qantas passengers around the world being stranded and the strike is headed towards being the worst the airline has faced since 2008, when an industrial strike by engineers cost the airline A$130 million ($133 million).

Qantas says it is making alternative flights and accommodation for stranded passengers, and refunds for people yet to travel.

An extended strike will benefit its rivals such as Virgin Australia on domestic routes and Singapore Airlines, British Airways and Chinese carriers on international routes.

Qantas's chief executive Alan Joyce said, "they are trashing our strategy and our brand …..they are deliberately destabilising the company and there is no end in sight."

"The airline will be grounded as long as it takes to reach a conclusion on this," Joyce said, adding that he could not take "the easy way out."

"Pilots, licensed engineers and baggage, ground and catering staff are essential to Qantas operations and the lock-out will therefore make it necessary for all Qantas aircraft to be grounded," he said.

"Aircraft currently in the air will complete the sectors they are operating. However, there will be no further Qantas domestic departures or international departures anywhere in the world."

Qantas is already losing A$15 million ($16 million) a week, with the total financial impact so far hitting A$68 million. Joyce said the latest move by the unions would cost the airline A$20 million a day.

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

All 108 aircraft in as many as 22 countries will be grounded until unions representing pilots, mechanics, baggage handlers and caterers reach agreements with Qantas over pay and conditions, Joyce said. A total of 39 flights are being delayed while two have been cancelled.

The grounding has already disrupted the travel plans and flights of 8,500 domestic and international passengers. Qantas airways estimate that the work stoppages and industrial action will cause inconvenience to almost 25,000 passengers.

In August, Qantas unions got agitated when the management said it would create an Asia-based airline with its own name and brand in order to improve its loss-making overseas business.

The five-year restructuring plan would mean 1,000 job cuts out of a workforce of 35,000. The airline is also ordering $9 billion of new Airbus to recover from the loss making international business.

This led to full shift employees walking-off, one-hour strikes, nationwide stoppages, overtime bans and daily meetings during working hours.

Early this month, Qantas grounded five aircrafts and reduced domestic flights by almost 100 a week after ground engineers had cut their number of working hours.

Qantas said that the lock-out will continue until the unions drop the extreme demands that have made it impossible for agreements to be reached.