Melbourne, Australia –

In an unprecedented move, Qantas Airways has shut down all flights for both international and domestic routes because of a labor dispute. Qantas released a statement that said, “all employees involved in industrial action would be locked out from Monday evening and flights grounded from 0600 GMT on Saturday.”

The airline has endured a series of strikes that have cost the airline $16 million a week involving baggage handlers, engineers and pilots.

The airline issued a statement on its Facebook page saying customers booked on Qantas flights should not go to the airport until further notice. The airline said a full refund would be available to those affected.

Passengers holding a ticket for British Airways but operated by Qantas have been informed they can switch to any BA flight for free.

While the airline dominates the domestic Australian market with about 65% of passengers using Qantas, its international operations have been losing money for a while and the airline has been wanting to reposition some of its assets and operations to Southeast Asia trying to focus on its new regional international plans.

The disruption to flights has also affected a meeting of Commonwealth heads of government in Perth, with reports that members from 17 delegations have been stranded in the city because of the dispute. It comes on a busy travel weekend, just days before the country’s biggest horse race, the Melbourne Cup.

Qantas CEO, Alan Joyce, said he made the decision early Saturday and then gained the approval of the Qantas board.

“We are locking out until the unions withdraw their extreme claim and reach an agreement with us,” Mr. Joyce said. “This is the fastest way to ensure the airline gets back in the air.”

In the past, airlines eventually bowed to union strikes and pressure because they needed to keep operating out of fear of going out of business, but Northwest Airlines used a model that made sure the unions and the employees had an equal stake in going out of business and losing their jobs. The strike busting plan worked and Northwest shed a considerable part of its union workforce and began operating in the black.

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