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Qantas Airways grounds global fleet due to strikes

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    Travelers gather at the Qantas sales desk at Sydney Airport in Sydney, Saturday, Oct. 29, 2011. Qantas Airways grounded its global fleet indefinitely and locked out workers Saturday after weeks of disruptive strikes, and the disappointed Australian government was seeking emergency arbitration. (AP Photo/Rick Rycroft)

CANBERRA, Australia  >>  Qantas Airways grounded its global fleet Saturday, suddenly locking out striking workers after weeks of flight disruptions an executive said could close down the world’s 10th largest airline piece by piece.

On its website, Qantas said flights operated by low-cost affiliate Jetstar are not affected by the shutdown. Jetstar flies between Honolulu and Sydney.

The Australian government called for an emergency arbitration hearing, which was adjourned early Sunday morning after hearing evidence from the unions and airline. It will resume Sunday afternoon when the government will argue that the airline be ordered to fly in Australia’s economic interests.

Planes in the air continued to their destinations, and at least one taxiing flight stopped on the runway, a flier said. Among the stranded passengers are 17 world leaders attending a Commonwealth summit in the western city of Perth.

When the grounding was announced, 36 international and 28 domestic Australian flights were in the air, said a Qantas spokeswoman, who declined to be named citing company policy.

Qantas said 108 airplanes were being grounded but did not say how many flights were involved. The spokeswoman could not confirm an Australian Broadcasting Corp. television report that 13,305 passengers were booked to fly Qantas international flights within 24 hours of the grounding.

The lockout was expected to have little impact in the United States. Only about 1,000 people fly daily between the United States and Australia, said aviation consultant Michael Boyd. "It’s not a big deal," he said. Qantas is "not a huge player here."

Los Angeles International Airport spokeswoman Diana Sanchez said Saturday that she was not aware of any passengers stranded at the airport because of the strike. Five Los Angeles-bound Qantas flights were already in the air when the lockout began and were expected to arrive as scheduled, she said.

Sanchez said Qantas has indicated it plans to cancel the handful of flights scheduled to depart from Los Angeles on Saturday.

The real problems for travelers are more likely to be at far busier Qantas hubs in Singapore and London’s Heathrow Airport, says another aviation consultant, Robert Mann.

Booked passengers were being rescheduled at Qantas’ expense, chief executive Alan Joyce said. Bookings already had collapsed after unions warned travelers to fly other airlines through the busy Christmas-New Year period.

He told a news conference in Sydney the unions’ actions have caused a crisis for Qantas.

"They are trashing our strategy and our brand," Joyce said. "They are deliberately destabilizing the company and there is no end in sight."

Union leaders criticized the action as extreme. Qantas is among the most profitable airlines in the world, but Joyce estimated the grounding will cost Qantas $20 million a day.

Qantas already had reduced and rescheduled flights for weeks after union workers struck and refused to work overtime out of worries a restructuring plan would move some of Qantas’ 35,000 jobs overseas.

The grounding of the largest of Australia’s four national domestic airlines will take a major economic toll and could disrupt the national Parliament, due to resume in Canberra on Tuesday after a two-week recess. Qantas’ budget subsidiary Jetstar continues to fly.

Prime Minister Julia Gillard said her government would help the Commonwealth leaders fly home after 17 were due to fly out of Perth on Qantas planes over the next couple of days.

"They took it in good spirits when I briefed them about it," Gillard told reporters.

British tourist Chris Crulley, 25, said the pilot on his Qantas flight informed passengers while taxiing down a Sydney runway that he had to return to the terminal "to take an important phone call." The flight was then grounded.

"We’re all set for the flight and settled in and the next thing — I’m stunned. We’re getting back off the plane," the firefighter told The Associated Press from Sydney Airport by phone.

Crulley was happy to be heading home to Newcastle after a five-week vacation when his flight was interrupted. "I’ve got to get back to the other side of the world by Wednesday for work. It’s a nightmare," he added.

Qantas offered him up to 350 Australian dollars ($375) a day for food and accommodation, but Crulley expected to struggle to find a hotel at short notice in Sydney on a Saturday night.

Australians Len and Christie Dunlop were stranded at London’s Heathrow Airport when their flight to Sydney was grounded.

The couple, who have lived in Leeds for four years, said they would have to catch up with fewer friends when they return to Perth for three weeks for a friend’s wedding.

"We’ve got dinners and lunch booked every day, so now we’ve missed two or three days worth of catching up with friends," Len Dunlop told ABC television. "It just a lot of frustration."

Gillard said her center-left government, which is affiliated with the trade union movement, had "taken a rare decision" to seek an end to the strike action out of necessity.

"I believe it is warranted in the circumstances we now face with Qantas … circumstances with this industrial dispute that could have implications for our national economy," Gillard told reporters.

Transport Minister Anthony Albanese described the grounding as "disappointing" and "extraordinary." Albanese was angry that Qantas gave him only three hours’ notice.

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.

"We are locking out until the unions withdraw their extreme claim and reach agreement with us," Joyce said, referring to shutting staff out of their work stations. Staff will not be paid starting Monday.

"This is a crisis for Qantas. If the action continues as the unions have promised, we will have no choice but to close down Qantas part by part," he added.

Richard Woodward, vice president of the pilot’s union, the Australian and International Pilots Association, accused Qantas of "holding a knife to the nation’s throat" and said Joyce had "gone mad."

Steve Purvinas, federal secretary of the mechanics’ union, Australian Licensed Aircraft Engineers Association, described the grounding as "an extreme measure."

Long-haul, budget airline AirAsia tried stepping into the void with what it called "rescue fares" for Qantas passengers. The offer was valid for ticket-holders flying within 48 hours to AirAsia destinations, the airline statement said.

Malaysia-based AirAsia flies to three Australian destinations, plus New Zealand.

The recent strike action in which two unions have had rolling four-hour strikes on differing days has most severely affected Qantas domestic flights.

In mid-October, Qantas grounded five jets and reduced domestic flights by almost 100 flights a week because aircraft mechanics had reduced the hours they were prepared to work.

Qantas infuriated unions in August when it said it would improve its loss-making overseas business by creating an Asia-based airline with its own name and brand. The five-year restructure plan will cost 1,000 jobs.

Qantas announced in August that it had more than doubled annual profit to AU$250 million, but warned the business environment was too challenging to forecast earnings for the current fiscal year.


Associated Press writer Katie Oyan in Phoenix and Associated Press Economics Writer Paul Wiseman in Washington contributed to this report.


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