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Sydney - Qantas CEO Alan Joyce is no stranger to clashing with unions. But his extraordinary move to ground the airline's global fleet over labour unrest is his biggest gamble yet and has angered unions, passengers and the Australian government.
The increasingly bitter dispute, which has dragged on since September, covers the sensitive issue of jobs in Australia being outsourced to Asia and even the very survival of the iconic 90-year-old national carrier nicknamed "The Flying Kangaroo".
Saturday's grounding of the fleet, causing chaos for nearly 70 000 travellers using Qantas worldwide, appeared a calculated move by Joyce to snuff out a costly dispute undermining his vision of the airline's future.
"The outcome of the gambit will decide whether Joyce is a good or bad manager," said David Liu, head of research at ATI Asset Management, which owns Qantas shares.
"I would call it a move enacted to try and get a resolution to an issue that has been going on for the best part of this year," he added.
Qantas shares have fallen almost 40 percent this year, underperforming an 8% dip in the benchmark index .
Joyce, who looks younger than his 45 years, took over at Qantas in 2008, having helped launch its low-cost offshoot Jetstar in 2003 after spells at now defunct Ansett Australia and at Aer Lingus in his native Ireland.
His relations with unions have often been rocky, but he is now embroiled in what could be one of the most divisive industrial disputes in Australia since the bitter and at times violent 1998 waterfront dispute under then Prime Minister John Howard.
The showdown between stevedores and employees backed by Howard's government was marked by strikes, mass dismissals, lockouts and legal battles.
The airline, which has threatened to lock out unions from Monday, is seeking to bring to a head a prolonged battle with its unions over pay, working conditions and plans to set up two new airlines in Asia.
But the dramatic escalation has angered the government and came as an embarrassment for Prime Minister Julia Gillard, who was hosting a summit of Commonwealth leaders in the western city of Perth, 17 of them booked to fly on Sunday with Qantas.
Gillard, criticised for not intervening earlier in the rift, swiftly referred the dispute to a labour tribunal in a bid to get Qantas back in the air again and prevent damage to the economy. Qantas and its subsidiaries control around two-thirds of the Australian domestic market.
Sack "Out-of-control CEO"
Ministers in the Labor government joined a chorus of criticism for the move to abruptly halt all flights globally, some hinting that the move appeared to have been pre planned by Qantas.
Joyce said that while the airline had contingency plans in place, it had not decided to ground the fleet until Saturday morning.
Assistant Treasurer Bill Shorten said he was "staggered", describing the decision as a "high-handed ambush" and a "radical over-reaction", while Transport Minister Anthony Albanese said he was disturbed by the lack of forewarning that such action was being considered.
The unions were also flabbergasted by the grounding, calling it a "stunt".
Captain Richard Woodward, vice president of the Australian and International Pilots Association, described Joyce's behaviour as "megalomaniacal" and said "the board should immediately sack their out-of-control CEO".
But Joyce, during a string of media appearances, said he had no other choice but to make "an unbelievable decision" that would cost the company A$20m a day.
"I've done this to bring certainty to those customers, to bring certainty to the employees, and stop this slow bleeding of Qantas - the slow roasting of Qantas - that these unions were doing," he told broadcaster ABC.
Asian strategy
Tom Ballantyne, an independent aviation analyst in Sydney, said Joyce's dramatic action had ensured the government got involved and could prevent the dispute dragging on.
"The strike was hurting Qantas financially and he had to bring it to a head and ensure it did not drag on for another 12 months," he said, adding that the strategy of setting up cheaper hubs in Asia was right.
"Joyce is going to get most of what he wants and for good measure. His strategy for Asia is right. One needs to be where the action is and you don't want the union's dictating commercial strategy," he said.
But he said the grounding of the fleet and the intention to lock out employees was poor timing.
Just a day before Qantas announced its dramatic move, a rowdy shareholders' meeting had agreed to increase Joyce's pay package by a hefty 71% to A$5m.
The decision sparked heavy criticism from unions, some passengers and the Australian Shareholders' Association since Qantas has not paid out a dividend for two years, during which time the share price has fallen by half.
Joyce and Qantas had been expecting the AGM to be a watershed, a showdown between unions and the board and management over the airline's plans and strategies.
After winning more than 95% support for its resolutions, including Joyce's pay, the airline had expected the unions to soften their stance.
Instead, they promised to keep up the battle, threatening stoppages through the peak Christmas holiday season and into next year.
Joyce said the move left the company little choice.
"We were dying a slow death. We had to do something drastic," Joyce told Sky News on Sunday.
