Qantas has grounded its entire mainline aircraft fleet as its battle with labour unions reaches breaking point. The airline announced the unprecedented move today, saying in a statement that “customers booked on Qantas flights should not go to the airport until further notice”.
The grounding follows a painful period of industrial action coordinated by three unions; the Australian Licenced Engineers Union (ALAEA), the Transport Workers Union (TWU) and the Australian and International Pilots Union (AIPA).
The unions are involved in a battle with the airline over several issues, including pay, conditions and the outsourcing of jobs overseas. Qantas revealed on Friday that the rolling strikes had already cost it AU$68 million (US$72 million), and would continue to cost AU$15 million per week if they continued.
The company’s CEO, Alan Joyce said however, that “agreeing to the union’s unreasonable demands would have a far greater cost on the company including risking the future of Qantas”.
The deadlock was broken today when the airline’s CEO Alan Joyce announced that Qantas would “lock out” its striking employees and ground all flights until further notice.
“We have got to bring this to an end,” Joyce said. “I have no option but to force the issue… In response to the unions’ industrial action, I announce that under the provisions of the Fair Work Act, Qantas will lock out all those employees who will be covered by the agreements currently being negotiated with the ALAEA, the TWU and AIPA,” he added.
The airline said that aircraft currently in the air will complete the sectors they are operating. But after they land, there will be no further Qantas domestic departures or international departures anywhere in the world. Jetstar and QantasLink flights will not be affected.
It is a desperate move by Joyce, who has said before that unions are “holding passengers to ransom”. The main bone of contention with pilots is the issue of pay parity between Jetstar and Qantas captains – something Qantas says would make the low-cost status of Jetstar untenable. The engineers’ union meanwhile, is demanding that Qantas does not offshore any jobs, as well as requesting substantial pay rises.
“These are impossible demands,” Joyce said. “We cannot agree to them because they could ultimately put the Qantas Group at risk.”
Whether that risk that Joyce speaks of is higher than the danger of grounding the airline’s entire fleet, time will tell. Qantas has now moved played the ball emphatically back into the unions’ court.
“I urge the members of the ALAEA, TWU and AIPA to consider their own interests and tell their leaders they want to reach reasonable and fair agreements that will be good for them and for Qantas,” said Joyce.