(Regular updates)

In an astonishing dummy spit, Qantas Group CEO Alan Joyce has grounded the Qantas domestic and international fleet until such time as the pilots, the licensed engineers and the ground handlers withdraw their lawful industrial claims and campaigns.

However everyone will be paid until 8 pm Monday eastern time, after which the members of those three unions will be locked out. Those employees who belong to other unions or are otherwise employed by the airline will apparently continue to be paid and will be required to report for work.

Assistance including hotels and bookings on alternative airlines will be given to passengers stranded mid flight, although all domestic flights currently in the air will complete their scheduled journeys.

Qantaslink, Jetstar and faux Qantas trans Tasman services flown by NZ subsidiry Jetconnect will continue to fly.

Total chaos and self-inflicted losses that will run to millions of dollars a day have now set in at Qantas.

The numbers of domestic passengers stranded in various cities around Australia would exceed 100,000 just based on typical passenger uplift by the carrier, without reference to those who would have been booked to leave their home cities in the next few days.

A large number of international visitors to Australia who are booked to leave the country in the next week will have to find alternative flights, and take some days longer to complete their itineraries.

The legal consequences of Joyce’s actions are unclear at this stage. All three unions concerned were granted the right to conduct court approved protected industrial action after passing the various tests concerning the pursuit of their long running claims in good faith, and securing member support in secret ballots.

At his press conference, in Mascot, Sydney, shortly before 5 pm, Joyce said he was resorting to “the only protected industrial action available to the airline” which was to shut it down.

Joyce said that bookings for key business travellers on east coast domestic routes were down by 25% while November international bookings were 10% lower than had been expected for this time of year.

“We’re not leaving passengers in the lurch,” Joyce said. “We’re putting them up in hotels.”

Based on its performance over the last financial year when Qantas earned revenues of $218 million per week (not including $50 million weekly sales by Jetstar in the same year) the airline is losing around $30 million in business each day and carrying additional millions per day in wages to other workers, lease or finance charges on jets that are no longer operating, and other fixed costs.

It is difficult to estimate these total daily charges, but given financing obligations, Qantas may now be losing more than $40 million a day.

Joyce said that the airline could not afford to lose $15 million a week in sales, which he described as unsustainable, but conceded in answer to questions that his actions would costs the airline at least $20 million a day. Using the revenue figures in its past financial year as a guide, Joyce is understating the daily revenue loss while not mentioning the additional fixed costs incurred by an inactive fleet.

Qantas has cash reserves of more than $3 billion.

At 6 pm the federal government said it was making an urgent application to Fair Work Australia to order an immediate cessation of industrial action by all parties on the ground of the national interest.

 

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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