Qantas Airways shutdown affects thousands
02:25 - Source: CNN

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Story highlights

NEW: Qantas says flights will resume Monday afternoon

The pilots union called the grounding of fleet a "maniacal overreaction"

A government labor board said the dispute could have inflicted "serious damage" to tourism

Sydney CNN  — 

Australia’s Qantas Airways said it plans to resume flights Monday afternoon after a government labor board ordered it to end a dispute with its unions that grounded the airline over the weekend.

Qantas jets will resume service over the next 24 hours in a “safe and phased approach,” company CEO Alan Joyce told reporters Monday morning.

Labor relations tribunal Fair Work Australia ordered an end to the labor dispute “to avoid significant damage to the tourism industry” after Qantas grounded its jets Saturday afternoon.The airline grounded 447 flights since Saturday and announced it would be locking out its unionized pilots, engineers, ramp, baggage and catering crews effective Monday evening amid a dispute with the unions that has dragged on for 14 months, the board said.

Qantas argued that the unions’ demands would leave the airline “seriously impaired or destroyed.”

The decision “provides certainty for Qantas passengers,” company CEO Alan Joyce said in a statement following the decision. He apologized to passengers.

The Australian and International Pilots Association said it hoped for a “positive outcome” from the talks, calling the decision to ground the airline a “gross overreaction” to its demands. “It is a sign that the current management has lost touch with the traveling public, its workers and the basic Australian ethos of free speech,” the union said in a statement.

At Sydney airport, columns of “canceled” illuminated the departure board. Throngs of weary passengers crowded the help desk to rebook with other airlines, as suitcases lay scattered all over the floor.

“It makes me wonder whether I would book with Qantas again,” said Isabelle Storer, who was stuck at the airport with her husband after a visit to the United States.

Their connection to Adelaide was canceled, leaving her frustrated because her husband needed medical treatment, she said.

Passenger Ron Fuller waited at the airport, albeit more optimistic.

“For a month or two, everyone will be anti-Qantas, there’s no doubt about that,” Fuller said. “But emotion probably gets in the way sometimes.”

The labor dispute involves three unions representing air and ground staff of Australia’s largest domestic and international airline.

Union officials have accused the airline of planning to outsource ground jobs at a cost of thousands of Australian jobs and of putting profits first. Pay and working conditions have also been at the center of the disputes.

The industrial action is aimed at ensuring Qantas will not have enough funds to set up overseas operations that will jeopardize job security, union officials said.

The move comes at an embarrassing moment for Australia, which is hosting dozens of heads of government and their staff for the Commonwealth Heads of Government Meeting in Perth.

Qantas CEO Joyce has come under fire for grounding the fleet, which was preceded by weeks of tension between the airline and its workers.

It’s “a maniacal overreaction,” said Richard Woodward, vice president of the Australian and International Pilots’ Union.

The decision to ground the Qantas fleet, stranding thousands of passengers around the world, was unnecessary and grossly irresponsible, he said in a statement, adding: “Alan Joyce is holding a knife to the nation’s throat.”

The Transport Workers Union of Australia said in on online statement: “Today’s unwarranted and disgraceful snap announcement by Qantas CEO Alan Joyce is designed to destroy Qantas as we have always known it.”

Qantas, which has its headquarters in Sydney, is the second oldest airline in the world, having marked the 90th anniversary of its foundation last year.

It employs about 32,500 people and flies to more than 180 destinations worldwide, according to the company website. For the financial year ending June 2010, it made a post-tax profit of 116 million Australian dollars.

CNN’s Hugh Williams contributed to this report.