Qantas Airways grounds global fleet due to strikes (AP)

CANBERRA, Australia ? Australia's government ordered an emergency arbitration hearing on Sunday after Qantas Airways grounded its global fleet amid a bitter dispute with striking workers, stranding passengers around the world.

Government leaders, who expressed frustration over the airline's actions, were expected to argue at the hearing that Qantas should be forced to fly in Australia's economic interests.

"It's not our place to start allocating responsibility, but what I also know is there is a better way to resolve these matters ... than locking your customers out," Australian Assistant Treasurer Bill Shorten told reporters ahead of the arbitration hearing in the southern city of Melbourne. "We want more common sense than that."

Qantas, the world's 10th-largest airline, announced Saturday that it would ground all flights. But CEO Alan Joyce said the airline could be flying again within hours if the three arbitration judges rule to permanently terminate the grounding and the unions' strike action.

The unions want the judges to rule for a suspension so that the strikes can be resumed if their negotiations with the airline fail.

"Within six hours, we can get the fleet flying again" after the aviation regulator provides a routine clearance, Joyce told Australian Broadcasting Corp. television Sunday.

"We have to wait and see what that process generates today," he said, referring to the court hearing.

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

When the grounding was announced, 36 international and 28 domestic Australian flights were in the air, the airline said.

Qantas, which flies 70,000 passengers a day, said 108 airplanes were being grounded at 22 airports, but did not say how many flights were involved. Spokesman Tom Woodward said 13,000 passengers were booked to fly international flights to Australia 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 U.S. and Australia, said aviation consultant Michael Boyd. "It's not a big deal," he said. Qantas is "not a huge player here."

Douglas Phillips and his wife, Diane, were among about 400 travelers at Los Angeles International Airport who were scrambling to find another way to Australia after their Qantas flight to Melbourne was halted at the last minute.

Douglas Phillips said they were buckled in and awaiting takeoff early Saturday when the pilot informed passengers that all Qantas flights had been grounded due to a company-wide "industrial action."

"At first everyone thought they were kidding for some reason, but then we realized they were deadly serious," said Phillips, of Dover, Delaware.

After getting a few hours of sleep at a Los Angeles motel, the couple managed to secure a spot on a Saturday night Virgin Australia flight to Sydney. They expected an eight-hour layover there before finally getting to Melbourne, nearly three days late.

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 indicated it planned to cancel the handful of flights scheduled to depart from Los Angeles on Saturday.

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

Booked passengers were being rescheduled on a 24-hour basis, with Qantas handling any costs in transferring bookings to other airlines, said Woodward, the Qantas spokesman.

Bookings already had collapsed after unions warned travelers to fly other airlines through the busy Christmas-New Year period.

Joyce told a news conference in Sydney that the unions' actions had created 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 that the grounding would 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 said.

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 said.

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 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," the chief executive 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," Joyce said.

Richard Woodward, vice president of the pilots' union, 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, 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 said.

Malaysia-based AirAsia flies to three Australian destinations, as well as 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 service 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 also announced in August that it had more than doubled annual profit to AU$250 million, but warned that the business environment was too challenging to forecast earnings for the current fiscal year.

___

Associated Press writers Christopher Weber in Los Angeles, Katie Oyan in Phoenix and Associated Press Economics Writer Paul Wiseman in Washington contributed to this report.

Source: http://us.rd.yahoo.com/dailynews/rss/topstories/*http%3A//news.yahoo.com/s/ap/20111030/ap_on_bi_ge/as_australia_qantas

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