Australian airline Qantas grounded all its aircraft Saturday in response to a labor dispute , in a step that will disrupt travel for thousands of people . Flights in the air will complete those journeys , the airline said in a statement , but there will be no further domestic or international departures worldwide . The industrial action involves three unions representing air and ground staff . Qantas , the flag carrier for Australia and its largest domestic and international airline , said that all employees involved in the strike would be locked out from Monday evening . `` Pilots , licensed engineers and baggage , ground and catering staff are essential to Qantas operations and the lock-out will therefore make it necessary for all Qantas aircraft to be grounded , '' the airline said . Australian Prime Minister Julia Gillard told reporters the dispute had `` escalated in a dramatic way '' during the day . As a result , the government had asked Fair Work Australia -- an independent national workplace relations tribunal -- to terminate the industrial action and resolve the dispute itself , she said . A hearing is taking place Saturday night . `` My message to Qantas , the employees and trade unions is : Australians do want to see this dispute sorted out . Qantas is an iconic Australian brand , it is the employer of thousands of Australians , thousands of people rely on it for their livelihoods and we do need this dispute to be brought to an end , '' she 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 . Gillard said government workers would help those whose flights home were booked with Qantas to make alternative plans . Speaking at a news conference in Sydney , Qantas chief executive Alan Joyce said it was a hard decision to ground the fleet but that the airline had been left with no alternative in the face of the unions ' `` extreme claim . '' Staff involved in the industrial action will be locked-out for as long as it takes , he said , and the unions `` will have to decide how badly they want to damage Qantas . '' Grounding its fleet will have a daily financial impact of about 20 million Australian dollars ( $ 21.4 million ) , Qantas said . Customers booked on Qantas flights should not go to the airport until further notice , the airline said . It will offer travelers full refunds or the chance to rebook . Flights with subsidiaries Jetstar and QantasLink , as well as Qantas flights across the Tasman Sea operated by Jetconnect and freight services , are not affected by the grounding , it said . The unions involved in the dispute reacted angrily to Joyce 's statement . Richard Woodward , vice president of the Australian and International Pilots ' Union ( AIPA ) , branded it `` a maniacal overreaction . '' 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 . '' Speaking to CNN , he accused Qantas management of `` complete brinkmanship '' and said the company 's action -- only announced Saturday -- had been planned for months . 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 . '' The union accused Qantas management of `` untruths and subterfuge '' in its dealings with staff , in a statement earlier this week . The airline plans to outsource ground jobs , the union says , at a cost of thousands of Australian jobs . The Australian Licensed Aircraft Engineers union ( ALAEA ) accused Qantas of lying to the media and putting profits first , in a statement on its website earlier this month . It said the union 's industrial action was aimed at ensuring Qantas `` will have less money to set up the overseas operations that will cannibalise Qantas routes and our job security . '' Qantas says the weeks-long dispute with staff has already affected more than 70,000 passengers and cost it about 15 million Australian dollars ( $ 16 million ) a week in lost revenue . London 's Heathrow airport said only a handful of long-haul Qantas flights had been scheduled to fly Saturday and Sunday , and it had been able to contact passengers to rebook their travel . 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 .
PM Gillard : `` We need this dispute to be brought to an end '' Australian pilots ' union says Qantas 's move is `` a maniacal overreaction '' Qantas boss says the unions ' `` extreme claim '' left the airline no choice . Travelers booked on Qantas flights are advised not to go to the airport .