Qantas Airways, a member of the oneworld alliance,  has cancelled all of its domestic and international flights effective immediately and the airline will lock out its employees on Monday.  The decision was in response to escalating tensions between labor and management.  Currently, unions that represent baggage handlers, engineers, and pilots have been involved in ongoing disputes revolving largely around the Australian flag carrier’s plans to establish new lower-cost airlines in Asia.

At a news conference today, the airline’s CEO, Alan Joyce, said he has “no choice but to force the issue,”  He estimated that the decision will cost the airline roughly A$20 million per day.  The decision to temporarily shutter the airline also impacted 17 heads of state and hundreds of diplomats from 54 member states who had flown on Qantas to the Commonwealth meeting in Australia and were now in need of alternative return flights.

The timing has become an embarrassment for Australia’s prime minister, who commented “I want to see this dispute sorted out” at a news conference earlier today.

Qantas will cover food and lodging costs for passengers already in transit and its rivals in Australia, which include Virgin Australia, will add flights.

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