This paper examines the strategic choices made by Qantas Airways, a full-cost legacy airline, and its low-cost carrier, Jetstar, regarding employment relations in the context of increasingly competitive market pressures. Initially these airlines pursued divergent employment relations strategies. As the external environment became more turbulent, these employment strategies began to converge. Both airlines have adopted a hybrid approach to employment relations which is crucial in determining whether the Qantas group can survive the current turbulence in the aviation industry which threatens to the long-term viability of the airline. This research identifies the strategic role that employment relation strategies play in establishing a sustainable business model for airlines that are comprised of both a legacy and low-cost airline.