HomeWorld BusinessQantas resumes flights grounded by labour dispute

Qantas resumes flights grounded by labour dispute

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Australia’s Qantas Airways returned to the air on Monday after grounding its entire global fleet over the weekend in a bold tactic to force the government to intervene in the nation’s worst labour dispute in a decade.

Qantas took the drastic step to ground all flights on Saturday, disrupting 70 000 passengers and spurring the government and its labour-market regulator to seek a quick end to hostilities between the airline and unions.

At the government’s instigation, Australia’s labour tribunal ordered Qantas to resume flights and banned trade unions, which have waged a damaging campaign of industrial action, from staging more strikes while negotiations continued.

“That was the only way we could bring that to a head,” a bleary-eyed Qantas CEO Alan Joyce told reporters after 36 hours of round-the-clock brinkmanship.

Later, after being given the all-clear from aviation regulators, Qantas resumed flights from Sydney with an Airbus A330 bound for Jakarta. Around the country and overseas, airport departure lounges filled up with Qantas passengers keen to resume their journeys after a frustrating weekend of waiting.

“I understand strikes happen, but to stop all flights without thinking about the passengers — I don’t agree with that,” said Mary Keers, a 50-year-old Irishwoman waiting at Singapore’s Changi Airport to catch a flight to Perth.

Joyce, dubbed a kamikaze by one newspaper for effectively staging his own strike against the unions, came under fire from Canberra and also credit rating agencies for the grounding.

Moody’s and Standard and Poor’s signalled possible credit downgrades for the airline yesterday, citing the grounding and the risk of brand damage. Both agencies currently rate Qantas at the lower end of investment grade.

But the share market, in contrast, judged Qantas and Joyce the winners, driving the airline’s shares up as much as 7,4%. The stock closed up 4,3% at A$1,61.

The tribunal ruling, handed down in the early hours of the morning, gives both sides 21 days to settle the dispute or submit to binding arbitration — an expedited process likely to favour Qantas in its battle with unions to cut costs and base more operations in Asia, a labour-law expert said.

“I think that will give Qantas a victory,” said Ron McCallum, professor of industrial law at Sydney University.

Qantas says it has lost about A$70 million ($75 million) since September from industrial action in its dispute with three trade unions over pay, working conditions and its Asian plan. Joyce had described the union campaign as “death by a thousand cuts” for the 90-year-old airline.

Despite Qantas’s share price rebound, the stock has lost more than a third of its value this year and investors worry about longer-term damage to the brand from the grounding, which disrupted the travel plans of some leaders at the end of a summit of Commonwealth nations in the western city of Perth.

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