Qantas Airways announced Tuesday (25 August) that it was shedding another 2,500 employees and making changes to its ground handling operations as it continues to struggle with the COVID-19 pandemic’s effects on international aviation. The news a day after the company’s head of international aviation left. The company said it is proposing to outsource its ground handling operations at the 10 Australian airports where the work is currently done in-house and if it does decide to outsource, then at least 2,000 Qantas employees could find themselves out of work. The airline group also said it is looking to outsource its bus services for customers and employees in and around Sydney Airport and that if it decided to go ahead with that plan then about 50 employees would be out of a job. Affiliate Jetstar Airways has already decided to outsource ground handling at the six remaining Australian airports where the work is done in-house, impacting 370 jobs.
The announcement Tuesday comes after the airline group announced a loff of A$2.7 billion in the 2020 financial year and a A$4 billion drop in revenue in the second half due to the COVID-19 crisis and associated border restrictions. Further significant losses are projected in FY21 and an at least A$10 billion drop in revenue due to the ongoing impact of COVID-19. Job losses of at least 6,000 have already been announced as the airline works to reorganise. The potential job losses of up to 2,500 as a result of Tuesday’s announcement would be in addition to the 6,000 figure. Planned capital investment is also being significantly reduced, including the deferral of aircraft orders. Qantas and Jetstar directly employ people in various ground operations roles – which includes baggage handling and aircraft cleaning – at 11 large airports around the country. They also use specialist ground handlers at airports at 55 other airports they fly to across Australia.
Qantas domestic CEO Andrew David said the moves and COVID-19 present “the greatest challenge the aviation industry has ever faced and airlines have to change how they operate to ensure they can survive long term. We’ve already taken drastic action, with more than 220 aircraft grounded, the vast majority of our workforce stood down and assets mortgaged to raise cash. Right now, our domestic capacity is at 20 percent of pre-COVID levels and international travel is expected to take years to recover. We know travel restrictions will lift eventually, but the market will be very different. Every airline will come through this much leaner and more efficient, and we have to be able to compete if we’re going to survive. Outsourcing this work to specialist ground handlers would save an estimated $100 million in operating costs each year.”
The 10 airports that Qantas proposes to outsource this work are Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Darwin, Melbourne, Perth, Sydney and Townsville. Qantas’ review will be undertaken over the next few months.