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An industrial dispute made the Australian airline Qantas to ground all international and domestic flights with immediate effect.

All employees involved in industrial action would be locked out from Monday evening and flights grounded from 06:00 GMT on Saturday.

With regard to the aircrafts currently in the air, they will complete their flights, but there will be no further departures.

Fair Work Australia, the national industrial tribunal, adjourned a hearing on the Qantas dispute on Saturday night. The tribunal – which has the power to suspend or terminate industrial action – is to reconvene later on Sunday.

It was reported that Australian Prime Minister Julia Gillard has warned that the dispute could have “implications” for the national economy.

Qantas airline has been hit by a series of costly strikes. Baggage handlers, engineers and pilots have been involved in the action which the company says is costing A$15 million (US$16 million) a week.

Qantas airline issued a statement on its Facebook page saying customers booked on Qantas flights should not go to the airport until further notice. Qantas said a full refund would be available to those affected.

An industrial dispute made the Australian airline Qantas to ground all international and domestic flights with immediate effect

An industrial dispute made the Australian airline Qantas to ground all international and domestic flights with immediate effect

Relations between the unions and Qantas management started deteriorating in August after the airline announced plans for restructuring and moving some operations to Asia.

Qantas airline has a 65% share of the domestic Australian market, but has been making heavy losses on its international flights.

Qantas restructuring is expected to mean the loss of 1,000 jobs from its 35,000-strong workforce.

The disruption to Qantas flights has also affected a meeting of Commonwealth heads of government in Perth, with reports that members from 17 delegations have been stranded in the city because of the dispute.

The dispute comes on a busy travel weekend, just days before the country’s biggest horse race, the Melbourne Cup.

Anthony Albanese, Australian minister for transport said the government would take action to intervene in the dispute.

“We are very concerned about Qantas’ actions, of which we were notified only mid-afternoon, with no advance notice from Qantas at any stage,” Anthony Albanese said.

“The government is making an urgent application to Fair Work Australia to terminate all industrial action at Qantas. This will be aimed at both actions by unions and by Qantas management.”

Qantas CEO Alan Joyce announced the grounding of the airline on Saturday: “The airline will be grounded as long as it takes to reach a conclusion on this.”

Alan Joyce said that he would not take “the easy way out” and agree to union demands.

“That would destroy Qantas in the long term.

“I’m actually taking the bold decision, an unbelievable decision, a very hard decision, to ground this airline.”

Alan Joyce said he made the decision early Saturday and then gained the approval of the Qantas board.

“We are locking out until the unions withdraw their extreme claim and reach an agreement with us,” he said.

“This is the fastest way to ensure the airline gets back in the air.

“They are trashing our strategy and our brand.

“They must decide just how badly they want to hurt Qantas, their members… and the travelling public.”

The Australian pilots association criticized the grounding.

“It’s unprecedented and really it has hijacked the nation. It really has put everyone on notice and… it’s forcing the government’s hand on this,” Barry Jackson of the Australian and International Pilots Association told Sky News.

“We really need to address this sooner rather than later and get the aircraft back in the air.”

Qantas said as of 04:00 GMT on Saturday, there were 64 aircraft in the air – 36 domestic and 28 international – carrying more than 7,000 passengers. In total, 108 aircraft will be grounded in 22 airports around the world.

Qantas also said 13,305 passengers were booked to travel on its planes from overseas airports to Australia in the next 24 hours. About 1,310 international passengers may be at international airports now waiting for their flights to depart.

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