Qantas dropped a bombshell on Tuesday and announced nearly 2,500 more jobs are at risk because the business plans to outsource its remaining ground handling operations.
The proposed cuts, in addition to the 6,000 already announced, would include 370 job losses at Jetstar and more than 2,000 at Qantas.
The news comes a week after the wider company blamed a “near-total collapse in travel demand” for recording a statutory loss before tax of $2.7 billion for the last financial year.
The Qantas brand is proposing to outsource its ground handling operations at the 10 Australian airports where the work is done in-house, which includes Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Darwin, Melbourne, Perth, Sydney and Townsville.
This plan, not yet confirmed, would take place after a review that would compare the efficiencies of using external ground handlers versus doing the work in-house.
Jetstar, meanwhile, has already decided to outsource ground handling at the six remaining Australian airports – Adelaide, Avalon, Brisbane, Cairns, Melbourne and Sydney Domestic – leading to 370 job losses, subject to union consultation.
The business said “customer-facing team members” at airports are not affected by the moves.
In addition, Qantas is looking to outsource bus services for employees and customers at Sydney Airport that could affect 50 members of staff.
Jetstar chief executive Gareth Evans said, “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.
“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.
“Contracting this work out also reduces the capital spend required each year. As an example, Qantas and Jetstar would need to invest a further $100 million on ground handling equipment over the next five years, such as tugs and bag loaders, if the work is kept in-house.
“The Qantas Group sets the safety standards through our safety management system – whether work is done in-house or [by] external suppliers. We expect some unions will come out and say these suppliers are unsafe, despite the fact they are used by every other airline in this country.
“We would never compromise on safety. We’ve already worked with some of these suppliers for decades and we know their track record on safety is consistent with work done in-house.”
The business predicts the move will save them $100 million in operating costs each year.
In June, the wider Qantas group announced it would cut 6,000 jobs altogether, or nearly 20 per cent of its workforce, and continue stand-downs for a further 15,000 employees.
Two months later, its full-year financial results revealed a loss before tax of $2.7 billion and an underlying profit before tax of just $124 million.
Joyce said the results were “shaped by extraordinary events that have made for the worst trading conditions in our 100-year history”.
“To put it simply, we’re an airline that can’t really fly to many places – at least for now,” he said.