Qantas flights were grounded for two days last month as a consequence of the industrial dispute [EPA]

An industrial dispute between Qantas and unions representing the Australian airline's employees is to be referred to an arbitration committee after the talks between the two sides collapsed.

Negotiators have been attempting to settle the long-running wage dispute prior to a Monday deadline imposed after a worker lockout by the airline last month resulted in all Qantas flights being grounded for two days.

The dispute, which pits the airline against 3,800 pilots, baggage workers, and caterers over its plans to lower operating costs, will now be referred to the Fair Work Australia arbitration board.

"We asked for a 21-day extension. We thought a negotiated outcome was possible, but they (Qantas) turned that down," said Anil Lambert, a spokesperson for the Australian and International Pilots Association who spoke to Thomson Reuters.

A spokesperson for the Transport Workers Union said Qantas was deliberately trying to stall talks, a move they said would work in management's favour.

"Our fear is that Qantas will drag this out for as long as it can," the spokesperson told the Reuters news agency.

For its part, the airline rejected claims that it had terminated negotiations.

In a statement to the press, it said: "after six months of negotiations including over 20 meetings, extending the talks by three weeks would not help us reach an agreement. We want to provide certainty for our customers and bring this issue to a close as quickly as possible."

Australia's national airline first angered unions in August when it unveiled plans to shift some of its operations outside of thje country, which unions said would cost 1,000 local jobs.

Hoping to cut costs, Qantas wants to set up two Asia-based airlines in an effort to turn around losses last year in its international business of $200 million.

Qantas said last month's grounding resulted in a loss of $68.4 million and led to a collapse in forward bookings.

The disputes have also affected the airline's stock prices. So far this year, shares of the company have fallen by a third. This downward trend continued on Monday when the stock closed the day down 1.2 per cent.

Since neither side can take any industrial actions during the arbitration, the airline has re-assured customers that flights will not be affected by the on-going negotiations.

“Qantas customers have returned in large numbers since we resumed flying and they can continue to book flights with absolute confidence,” said Chief Executive Officer, Alan Joyce.

Source: Agencies