Quantas, the Australian National Carrier, after being damaged by the action of three unions, has fought back in an unusual way, by grounding its entire fleet, effective immediately.
Alan Joyce, the Irish-born CEO of Qantas just announced the grounding, saying that the airline will take care of its customers and all of its staff who were not involved in the industrial action.
Customers in transit will be accomodated in hotels, no matter where they are in the world and Qantas ground staff will help them to make arrangements for other flights, to continue their travel plans. It is estimated that 188 flights are involved, at 22 airports around the world.
Any aircraft still in the air at the time of the grounding order was to be grounded, once they reach their next destination, no matter where it is in the world.
Staff covered by the three unions involved in the industrial action are to be locked out and will not be paid, starting Monday evening, Australian Eastern time. All other staff are to report to work as usual, and will be paid.
Joyce said, “… Once the lockout commences, those employees who are locked out will not be required and will not be paid.” He also said any customers who wished to cancel their flights, would receive a full refund.
The three unions involved in the dispute, the Australian Licensed Aircraft Engineers Association (ALAEA), Transport Workers Union (TWU) and Australian and International Pilots Association (AIPA), have been causing problems for Qantas for 15 months, and have recently stepped up the disruptions.
Qantas customers were already being massively disrupted, Joyce said, with 10,000 customers impacted on Friday, alone. The Unions had previously said they intended to carry on with their industrial action for another 12 to 18 months. Joyce said this was clearly unacceptable.
The industrial action was having a massive effect, not only on Qantas, but on all related tourism industries and on Australia as a destination.
As is often the case with union demands, some of the demands made no sense. Joyce said one of the demands was for Jetstar pilots to be paid the same as Qantas pilots. That would have made Jetstar uncompetitive.
Jetstar, the low cost carrier that Qantas created to compete against Virgin Australia, will continue to fly, as will Qantas freight.
The industrial action was already costing the airline around $15 million per week. It is expected that grounding the fleet will cost the company around $22 million per day.
The Qantas board agreed with Joyce’s plan today, which led to the grounding announcement he made.
Joyce is using the provisions of Australia’s Fair Work Act against the recalcitrant unions.
The unions were concerned about a range of issues, from pay to job security.