Qantas plans to cut another 2,500 ground crew jobs, on top of 6,000 existing redundancies

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3 years ago

By The Business host Elysse Morgan and business reporter David Chau

Posted1 day ago, updated1 day ago

Qantas plans to cut an extra 2,500 jobs by outsourcing its ground handling work.(AAP: Bianca De Marchi)

Qantas has revealed plans to outsource ground handling at major Australian airports, including Sydney and Melbourne, as well as at larger regional airports.

Key points:

Qantas says it will save $100 million per year by outsourcing its ground handling work
It has received $267 million worth of JobKeeper subsidies to retain its workforce
The airline reported a $2 billion full-year loss due to COVID-19 travel restrictions

The plans will likely cut almost 2,500 jobs across Qantas and its budget airline Jetstar, on top of the 6,000 job cuts already announced in June this year.

The roles include baggage handlers, tug drivers and cabin cleaners. Qantas said the work was already being outsourced in smaller airports around the country.

It said it believed it could save $100 million a year by extending the arrangement to major airports.

Qantas said it has not yet made a final decision on this aspect of its "COVID recovery plan", and is currently in discussions with affected workers and their unions.

This major cost-cutting measure comes after Qantas last week reported a $2 billion annual loss and scrapped its dividend.

"Further significant losses are projected in the 2021 financial year, and an at least $10 billion drop in revenue due to the ongoing impact of COVID," Qantas said in a statement.

Qantas still has much of its fleet grounded due to the coronavirus pandemic.(ABC News: John Gunn)

Over the next few months Qantas will look to outsource its ground handling work at 10 airports (where the work is currently done in house) — Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Darwin, Melbourne, Perth, Sydney and Townsville.

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This measure, by itself, is expected to result in 2,000 job losses, including management roles.

"Customer facing team members at airports are not impacted or in scope for the reviews," Qantas added.

Jetstar has already decided to outsource ground handling work at Adelaide, Avalon, Brisbane, Cairns, Melbourne and Sydney domestic airports, "subject to union consultation".

This measure is likely to cost 370 workers their jobs.

Jetstar said it already outsources the work at 17 Australian airport terminals.

Qantas said it was also looking to outsource 50 jobs connected to its bus service for customers and employees at Sydney Airport.

'Tough decisions' necessary for airline's survival

Qantas's domestic chief executive Andrew David said the airline was grappling with "the greatest challenge the aviation industry has ever faced" as coronavirus-related travel restrictions continued to bite.

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"Airlines have to change how they operate to ensure they can survive long-term," he said.

"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."

Jetstar's chief executive Gareth Evans echoed similar sentiments.

"We realise this decision will be extremely difficult news for our ground handling team and their families at what is already a very challenging time," he said.

"But unfortunately this ongoing crisis means we have to make some really tough decisions which impact our team members who have provided a consistent and professional operation over many years."

Qantas CEO urged to resign

The Transport Workers Union (TWU) called for Qantas chief executive Alan Joyce to step down, and for Prime Minister Scott Morrison to intervene.

"Qantas has taken millions in JobKeeper wage subsidies, more than any other company, with the express intent of keeping people employed," TWU national secretary Michael Kaine said.

"But now Alan Joyce wants to destroy thousands more livelihoods. This is callous abuse of public money. The chief executive must resign.

"We are calling on the Prime Minister to intervene and call Qantas to account over its misuse of taxpayers' money.

"There is no dividend for the public if a company like Qantas can sack thousands of workers after receiving such financial support.

"The Prime Minister has failed to date to implement a national plan on aviation. He must act now to urgently save jobs and ensure a return for the public."

Qantas has received $267 million through the JobKeeper program so far, and $248 million through other government financial assistance packages.