After announcing 6,000 permanent job losses in June, the Qantas Group this week revealed that a further 2,400 jobs will be lost as it outsources ground handling services at major Australian airports.
Qantas and Jetstar currently directly employ around 2,370 ground handling staff at 11 major Australian airports, which work in roles such as baggage handling and fleet presentation. In addition, Qantas employs around 50 staff to operate bus services at Sydney Airport for customers and employees.
Qantas is now proposing to outsource all of this work, as it already does at 55 smaller Australian airports.
The change would affect Qantas ground handling staff at Adelaide, Alice Springs, Avalon, Brisbane, Cairns, Canberra, Darwin, Melbourne, Perth, Sydney and Townsville airports. Customer-facing roles would not be impacted by this particular change.
775 Qantas ground handling staff already applied for voluntary redundancies following the announcement of job losses in June due to decreased flying activity.
Qantas Domestic CEO Andrew David said that outsourcing this work would save the airline around $100 million in operating costs annually. He said that the “drastic action” was necessary for Qantas to be able to compete in the future, but acknowledged the impact this would have on staff.
“Today’s announcement will be very tough for our hard-working teams, most of whom have already been stood down for months without work. This obviously adds to the uncertainty but this is the unfortunate reality of what COVID-19 has done to our industry,” Mr David said.
Jetstar CEO Gareth Evans said that outsourcing this work would also save Qantas and Jetstar around $100 million in capital expenditure over the next five years, as they won’t need to buy new equipment such as airport vehicles and bag loaders.
“Every major airline around the world uses these specialist providers to support their operations. These ground handlers provide these services to many airlines at airports, rather than just one, and provide scalable resources, which makes them very cost effective,” Evans said.
Major ground handling service providers include Dnata (owned by Emirates), Swissport & Aerocare (both owned by HNA Group) and Menzies Aviation. Australian-owned Aviation Ground Handling also currently services around a dozen Australian airports. Many airlines use these third-party services, particularly at non-hub airports, as they usually serve multiple airlines and are therefore more efficient due to their economies of scale.
Unsurprisingly, the announcement was strongly criticised by unions.
Join the discussion on the Australian Frequent Flyer forum: Qantas to outsource ground handling across Australia
Qantas International CEO departs
Qantas also announced this week that Qantas International CEO Tino La Spina will leave the Qantas Group from 1 September. He will not be replaced, with Qantas Domestic CEO Andrew David to oversee the airline’s (currently almost non-existent) international operations for the foreseeable future.
The airline described this as another tough but necessary decision with international travel unlikely to return until at least mid-2021.
Join the discussion on the Australian Frequent Flyer forum: Qantas International CEO to leave