Sydney: Australian pilots on Sunday threatened legal action against embattled carrier Qantas, saying chief executive Alan Joyce's decision to lock them out while grounding the airline could be unlawful.

Pilots have been engaged in protracted talks with management over wages, conditions and outsourcing to Asia, but they have yet to walk off the job -- unlike baggage handlers, engineers and ground staff.

Australian International Pilots Association (AIPA) vice-president Captain Richard Woodward said work stoppages were not in their plans.

"Pilots have made it clear from the start that we would not take industrial action that disrupts passengers. We have stuck to that to this day," he said.

"Alan Joyce, on the other hand, has opted to disrupt passengers in the most devastating way possible.

"Pilots have not been on strike and we are not seeking anything that would damage profitability."

He said the union's legal team was looking at its options, saying Joyce's decision could be in breach of the Fair Work Act.

"We believe Mr Joyce's action is unlawful and we are currently seeking legal advice. He has locked out short-haul 737 pilots who aren't even involved in any action at all," he said.

The airline's long-haul pilots union voted in July to take limited industrial action for the first time in 45 years, but it has only involved unauthorised in-flight announcements telling passengers about their dispute.

A major sticking point has been the union's demand that a new clause is included in contracts to stop Qantas from potentially outsourcing pilots to cheaper bases in Asia.

The union, which represents some 1,700 Qantas international pilots, has said it is also seeking a pay increase of 2.5 percent per year.

The airline claims the demands are greater than that and will drive up airfares, cost jobs and make the carrier unprofitable.

Joyce on Saturday took the dramatic decision to ground Qantas's entire fleet immediately and lock out all employees involved in industrial action from Monday evening without pay.

Tags: flights cancelled, pilots threaten, Qantas, Qantas Airlnies