Qantas has announced its plans to outsource more than 2,000 jobs in the latest rounds of cost-cutting measures for the airline amid a chaotic year for the aviation sector.
Qantas has finalised plans to outsource 2,000 jobs across eleven airports around Australia after first announcing plans to outsource 2,500 positions earlier this year in August. Qantas’ budget subsidiary has already moved to outsource 370 jobs, with the ABC reporting that the move “left more than 2,000 baggage handlers and cabin cleaners fighting to keep their jobs.”
The most recent announcement that Qantas will outsource 2,000 jobs in the latest round of cost-cutting measures comes on top of the airline’s previous announcement of the more than 6,000 redundancies that were announced in June.
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The move is said to save Qantas’ bottom-line around $100 million each year with the move to outsource 2,000 jobs, and will save an additional $80 million by reducing spend on equipment.
Qantas has now cut its workforce from 29,000 before the pandemic by more than 8,500 jobs as the COVID-19 pandemic wreaked havoc with the aviation industry and massively limited the free movement of travellers.
Qantas has said in a statement that “a number of external bidders, some of whom already provide these services at 55 airports across Australia, were able to meet all of the objectives, including reducing annual costs by approximately $103 million.”
Andrew David, Qantas’ domestic chief executive has said that the announcement represented “another tough day for Qantas, particularly for our ground handling teams and their families.”
“We’ve already taken drastic action, with more than 220 aircraft grounded, the vast majority of our workforce stood down and assets mortgages to raise cash” he said, adding that “unfortunately, COVID has turned aviation upside down.”
“Right now, our domestic capacity is at 20 per cent of pre-COVID levels and international travel is expected to take years to recover.”
“Airlines around the world are having to make dramatic decisions in order to survive and the damage will take years to repair,” Mr David added, forecasting that international travel will not return to pre-pandemic levels until around the 2024-mark. “We know travel restrictions will lift eventually,” he said,” 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.”
“We have a massive job ahead of us to repay debt and we know our competitors are aggressively cutting costs to merge leaner,” chief executive Mr David said. In his statement, Andrew David made it clear to investors that there was no risk of deteriorating services or safety protocols with the use of outsourced companies.
“We have used these specialist ground handlers at many Australian airports for decades and they’ve proven they can deliver a safe and reliable service more efficiently than it’s currently done in-house,” he said. “This isn’t a reflection on our people but it is a reflection of economies of scale and the urgent need we have because of COVID to unlock these efficiencies,” David said.
In reference to those that have had their position outsourced, Qantas added that “affected employees will be entitled to a redundancy package and given support to transition to new jobs outside the business.”
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“It’s expected that there will be a range of opportunities for some impacted team members with suppliers in the sector as travel demand gradually recovers,” Qantas said. In reference to a recent bid from the Transport Workers Union on the behalf of its employees, Qantas said that “their resulting national bid was, by their own admission, theoretical, with no roadmap of how projected cost savings would be achieved.”
“For instance, the proposal resulted in 1 million surplus labour hours – or around 900 roles – but no details on how to deal with that surplus. It also did not meet the objectives relating to capital expenditure on ground services equipment nor matching the ground handling services (and their cost) to fluctuating levels of demand.”
These positions include outsourcing baggage handling, ramp working and cabin cleaners that were previously based at Melbourne, Sydney, Brisbane, Perth, Adelaide, Cairns, Townsville, Alice Springs, Canberra and Darwin airports.
The ABC’s Nassim Khadem writes that Qantas has said “outsourcing would allow it to match ground handling services with fluctuating levels of demand, on the basis that Qantas expects its flying schedule to be more variable during the COVID-19 crisis and beyond.”