Australia’s Qantas Airways Ltd said yesterday it was grounding all aircraft over a labor dispute, a move that would cost it A$20 million (US$21.4 million) a day.
The airline said in a statement that from tomorrow evening it would lock out all employees over a protracted industrial dispute with the engineers association, pilots, catering and ground handling associations.
An extended grounding would benefit domestic rival Virgin Australia and others such as Singapore Airlines, British Airways and Chinese carriers on international routes.
“First, these three unions are sticking by impossible claims that are not just to do with pay, but also to do with unions trying to dictate how we run our business,” Qantas CEO Alan Joyce said in a statement. “They are trashing our strategy and our brand. They are deliberately destabilising the company. Customers are now fleeing from us.”
The Australian government said it will take action to intervene in the protracted Qantas industrial dispute after the company announced yesterday it was grounding all flights.
“I am very concerned about Qantas’ future. The government is making an urgent application to Fair Work Australia [an industrial court] … to terminate all industrial action at Qantas. This will be aimed at both actions by unions and by Qantas management,” Australian Transport Minister Anthony Albanese said.
The unions have been taking strike action since last month over pay and opposition to Qantas plans to cut soaring costs. The strike is the worst dispute the airline has faced since 2008, when industrial action by engineers cost it A$130 million, according to local media.
Key high-value domestic bookings on east coast routes are down by a quarter. Next month’s international bookings have fallen nearly 10 percent, Joyce said.
The airline said the financial impact to date has reached A$68 million and the action is costing Qantas approximately A$15 million a week in lost revenue.
It is looking at setting up two new airlines in Asia. It plans to cut 1,000 jobs and order US$9 billion of new Airbus aircraft as part of a makeover to salvage the loss-making international business.
About 70,000 passengers have been affected and more than 600 flights canceled.
Aircraft currently in the air would complete the sectors they are operating. However, there will be no further Qantas domestic or international departures anywhere in the world, it said.
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