Qantas to cut up to 2,500 jobs as it outsources ground handling in Australia

CORPORATE ACTION - SYDNEY. Qantas Airways Ltd said on Tuesday it planned to cut up to 2,500 jobs by outsourcing its Australian ground handling operations to lower costs as it braces for a A$10 billion ($7.17 billion) hit to revenue due to the pandemic this financial year.

The expected job cuts are on top of 6,000 across its workforce announced in June, which would take the total job losses to nearly 30% of its pre-pandemic staffing.

Qantas' head of domestic operations Andrew David said in a statement outsourcing the ground handling jobs would save an estimated A$100 million each year in operating costs.

It would also allow the airline to avoid investing A$100 million in equipment like tugs and bag loaders over the next five years by outsourcing the work to a specialist ground handler, Gareth Evans, Chief Executive of Jetstar, Qantas' budget arm, said in the statement.

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The statement did not name the firms that could be involved in the outsourcing, but major ground handlers in Australia include dnata, Swissport and Menzies Aviation.

Qantas said as part of a union agreement, it would also have to offer the opportunity for the 2,000 ground handlers at its main brand to bid for the work, though it will not have to do so at Jetstar.

The airline said it would complete its review over the next few months. Most of its ground handling employees have been stood down from work for months and are receiving government aid due to the decline in travel demand.

The Transport Workers' Union, which represents the ground handlers, did not respond immediately to a request for comment