Government threatens to act on Qantas dispute

THE Gillard government has threatened to intervene in the damaging standoff between Qantas and three key unions, as the acrimonious dispute looks set to disrupt the travel plans of thousands of people over the Christmas holidays and beyond.

As a minister described comments from one union leader as ''un-Australian'', Qantas sought to blame the unions for its decision to ground five aircraft for up to a month, and said it would be forced to park more if the dispute continued for much longer.

Thousands of Qantas passengers face their second consecutive day of travel disruptions today when hundreds of licensed aircraft engineers strike for four hours.

Qantas said about 8000 passengers would be inconvenienced by the cancellation of 17 flights and delays to 32. Some rugby fans travelling to New Zealand for the Rugby World Cup this weekend face delays of more than three hours, it said.

With both sides stepping up their attacks, the Tourism Minister, Martin Ferguson, a former president of the ACTU, warned that the government will intervene in the dispute if there is not a resolution because of the damage it was doing to industries such as tourism. ''It is about time the parties sat in a room and sorted these issues out. They have a responsibility to think about the broader national interest,'' he said.

The government can apply to Fair Work Australia for Qantas and the unions to be forced into arbitration on the grounds the dispute is causing significant damage to the economy. Qantas and third-parties such as Tourism Australia can also make similar applications.

In 1989 the Hawke government responded to the crippling pilots' dispute by allowing the air force and foreign airlines to service domestic routes.

Mr Ferguson said comments from Steve Purvinas, the federal secretary of the Australian Licensed Aircraft Engineers Association, for passengers to consider other airlines in the lead-up to Christmas were ''un-Australian''.

But Mr Purvinas would not back down, saying Qantas had ''supported what I have had to say by changing their flight schedule to reflect they have broken aircraft … and not enough engineers to fix them''.

He described Qantas groundings as an ''absolute PR stunt'', saying the engineers' action today would have no impact on Qantas if it accepted an offer from members to work overtime to cover stoppages.

But the airline's chief executive, Alan Joyce, again accused the unions of mounting a co-ordinated campaign which was ''clearly hurting Qantas and our brand''.

''It is having an impact on our costs and on forward bookings,'' he said. ''The union leaders have boasted that they intend to keep on ramping up the action and the damage to our company and our brand for at least the next 12 months. Job security is not

enhanced by this action.'' Mr Joyce said Qantas had not lobbied the government to intervene, but would continue to keep it abreast of a ''whole range of issues'', including the industrial action.

Asked whether the government should intervene, he said: ''We believe we have to work through the negotiation process. We are available any time, anywhere to talk to the unions.''

He said it was too early to put a figure on the cost to Qantas of the dispute. Macquarie Equities analysts have already estimated the cost at up to $20 million.

On-time performance of flights had fallen from 87 per cent a month ago to 77 per cent today.

Airfares may be forced up by Qantas's cuts in flights. An analyst at CBA Equities, Matt Crowe, said Qantas's decision to cut about 100 domestic flights a week would be ''slightly supportive of airfares''.

The grounding of five Qantas jets from next week will reduce services to and from Sydney, Melbourne, Brisbane and Adelaide.

Virgin Australia is seeking to take advantage of the woes besetting its arch rival by considering an increase to flights. It will put on an extra plane between Sydney and Melbourne today.

The long-haul pilots union has been lobbying shareholders to oppose Qantas's executive-pay card at its annual meeting on October 28. But Mr Joyce said the company had the backing of large institutional shareholders. ''We are not going to be intimidated by any union,'' he said.