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Qantas flies again after court order

Australia’s Qantas Airways returned to the air on Monday after grounding its entire global fleet over the weekend in a bold tactic to force the government to intervene in the nation’s worst labour dispute in a decade.

world Updated: Oct 31, 2011 20:10 IST

Australia’s Qantas Airways returned to the air on Monday after grounding its entire global fleet over the weekend in a bold tactic to force the government to intervene in the nation’s worst labour dispute in a decade.

Qantas took the drastic step to ground all flights on Saturday, disrupting 70,000 passengers and spurring the government and its labour-market regulator to seek a quick end to hostilities between the airline and unions.

At the government’s instigation, Australia’s labour tribunal ordered Qantas to resume flights and banned trade unions, which have waged a damaging campaign of industrial action, from staging more strikes while negotiations continued.

“That was the only way we could bring that to a head,” Qantas CEO Alan Joyce told reporters after 36 hours of round-the-clock brinkmanship.

Later, after being given the all-clear from aviation regulators, Qantas resumed flights from Sydney with an Airbus A330 bound for Jakarta.

Joyce, dubbed a "kamikaze" by one newspaper for effectively staging his own strike against the unions, came under fire from Canberra and also credit rating agencies for the grounding.

Moody’s and Standard & Poor’s signalled possible credit downgrades for the airline on Monday, citing the grounding and the risk of brand damage. Both agencies currently rate Qantas at the lower end of investment grade.

But the share market, in contrast, judged Qantas and Joyce the winners, driving the airline's shares up as much as 7.4%. The stock closed up 4.3% at A$1.61.

The tribunal ruling, handed down on Monday morning, gives both sides 21 days to settle the dispute or submit to binding arbitration — an expedited process likely to favour Qantas in its battle with unions to cut costs and base more operations in Asia, a labour-law expert said.