“Another Tough Day” As Qantas Axes More Staff

By Glenn Dyer | More Articles by Glenn Dyer

The market initially liked the news that Qantas was sacking thousands of ground staff following a cost-cutting decision to outsource the majority of its ground-handling operations.

The airline has revealed 2,000 jobs will be axed across 10 Australian airports, as part of its overhaul aimed at keeping Qantas flying when global markets re-open in the wake of the successful introduction of vaccines for COVID-19.

Qantas’ decision came reviews which began in August to reduce the size of the business following subdued travel numbers due to the health crisis.

Monday’s announcement brings the total job losses in Qantas to approximately 8,500 of its 29,000 pre-pandemic workforce.

The shares hit a day’s high of $5.59 shortly after trading started at 10 am, then fell steadily to end at $5.38, down 2.5% as news of the sackings decision sparked protests from unions and other staff.

COVID-19 and measures taken to halt its spread such as lockdowns, border closures, and social distancing saw Qantas to report a $2.7 billion statutory loss for the June 30 financial year.

Qantas chief executive of domestic and international operations, Andrew David said the industry has been turned “upside-down” and it will take years to recoup from the financial damage inflicted by the global shutdown.

“This is another tough day for Qantas, particularly for our ground handling teams and their families,” Mr. David said.

“Unfortunately, COVID has turned aviation upside down. Airlines around the world are having to make dramatic decisions in order to survive and the damage will take years to repair.”

The premier airline said impacted staff will be entitled to redundancy packages and will help workers find jobs outside of the company.

It is expected the outsourcing of ground handling operations will reduce costs by $100 million annually and avoid large spending on ground handling equipment.

“While there has been some good news recently with domestic borders, international travel isn’t expected to return to pre-COVID levels until at least 2024,” Mr. David said.

Other airlines were using outsourced ground staff before COVID erupted in February at Sydney and other airports in Australia.

Swissport, a company owned by China’s HNA, is the biggest ground handling company in the world. If it bids, that could be a problem in the current climate.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →