Qantas is grounding its entire fleet and locking out its staff in response to unions' industrial action.
The airline is fighting with its pilots, ground staff and engineers over pay, conditions and the outsourcing of jobs overseas.
In a shock move, Qantas boss Alan Joyce announced today all domestic employees involved with the dispute will be locked out as of 8pm (AEDT) Monday, but the fleet would be grounded immediately.
Both the international and domestic fleet have been grounded indefinitely.
Have you been affected by the grounding? Tell ABC News Online
"We are locking out until the unions withdraw their extreme claim and reach an agreement with us," Mr Joyce said.
"It's an unbelievable decision, it's a very hard decision ... we have no alternative. This is the fastest way to ensure the airline gets back in the air."
Mr Joyce said his hand had been tipped by the impossible demands of three unions.
"They are trashing our strategy and our brand," he said.
"They are deliberately destabilising the company and there is no end in sight."
The move comes as a result of a long-running industrial impasse between Qantas and three unions: the Australian and International Pilots Association (AIPA), the Transport Workers Union (TWU) and the Australian Licenced Aircraft Engineers Association (ALAEA).
Mr Joyce said if the industrial action continued, Qantas would have no choice but to shut down its business "part by part".
QantasLink and Jetstar will not be grounded.
Government concerned
The Federal Government was told about Qantas' plan for the first time this afternoon.
Transport Minister Anthony Albanese has expressed frustration, saying the Government is extremely concerned about the future of Qantas, its workforce, and also the travelling public.
Mr Albanese says he is disappointed by Qantas' decision "made on a Saturday morning with notice to the Government mid-afternoon, one day after an annual general meeting."
"I would hope the parties to this dispute act like adults," he told a press conference this afternoon.
"[The Government] remains of the view, that with a little bit of commonsense and acknowledgment that there is a common interest between management and employees a solution can be found."
Mr Albanese says the Government played a role in facilitating discussions between Qantas and the employees, but at no stage has there been a request for government intervention.
He says the Government will be making an application to Fair Work Australia over the dispute.
They are trashing our strategy and our brand. They are deliberately destabilising the company and there is no end in sight.
Alan Joyce
The aircraft engineers union says it is not surprised Qantas would take such extreme action as grounding its fleet and locking out workers.
"I think this is an extreme measure for the CEO and airline to take given we've cancelled our industrial action for the next three weeks," ALAEA federal secretary Steve Purvinas said.
The leadership of the Australian Workers Union says they will be meeting tonight and tomorrow on the crisis.
Refunds, ticket transfers
Mr Joyce said he was sorry the course of action had become necessary but the ball was now in the unions' court.
"They must decide just how badly they want to hurt Qantas, their members ... and the travelling public," he said.
The airline said at 5pm (AEDT) on Saturday there were 64 aircraft in the air, 36 domestic and 28 international carrying more than 7,000 passengers.
In total 108 aircraft will be grounded in 22 airports around the world.
The airline will offer hotel accommodation and alternative flights to those who are mid-journey and cannot get home when the grounding takes effect.
And there will be refunds and ticket transfers available to passengers whose flights are cancelled.
Qantas will keep passengers updated on the situation via its website, Facebook page and Twitter.
The airline says 13,305 passengers are booked to travel on Qantas planes from overseas ports to Australia in the next 24 hours.
About 1,310 international passengers may be at international airports now waiting for their flight to depart.
Earlier, Mr Joyce said operations could be slashed by 50 per cent within a year, resulting in thousands of jobs lost, if its industrial disputes continue into 2012.
![[FnG]magnolia](/styles/overclockers/avatars/9.png){kind=avatar}
