Qantas is set to cut up to 2,500 jobs by outsourcing its Australian ground handling operations as it braces for a massive revenue hit due to the pandemic.
The announcement on Tuesday comes after the embattled airline reported a $1.9 billion full-year loss.
Baggage handling, bus driving and aircraft cleaning jobs with Qantas and Jetstar would be impacted by the move, with the outsourcing happening at 10 airports across the country.
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 per cent of its pre-pandemic roles.
Qantas Domestic Chief Executive Officer Andrew David said the pandemic was one of the greatest challenges the industry had faced.
He said airlines were having to change how they operated in order to survive.
‘Today’s announcement will be very tough for our hardworking teams, most of whom have already been stood down for months without work,’ he said.
‘This obviously adds to the uncertainty but this is the unfortunate reality of what COVID-19 has done to our industry.’
Outsourcing the ground handling jobs would save an estimated A$100million a year in operating costs, Mr David Said.
‘We’ve already taken drastic action, with more than 220 aircraft grounded, the vast majority of our workforce stood down and assets mortgaged to raise cash.
‘Right now, our domestic capacity is at 20 per cent of pre-COVID levels and international travel is expected to take years to recover.’
The airports affected by the move are in Sydney, Melbourne, Brisbane, Adelaide, Canberra, Cairns, Townsville, Alice Springs, Perth and Darwin.
Qantas and Jetstar outsource ground handling jobs at 55 other ports around the country.
Last week the airline announced it would not begin flying internationally again until at least July 2021 as it records a $2billion loss in the 2020 financial year due to the COVID-19 pandemic.
A near total collapse of travel demand and revenue contributed to the losses, which are similar to those recorded within other airlines throughout Australia.
In addition to the international border closures, in place since March 20 several Australian states closed their domestic borders, further crippling an industry already on its knees.
Bosses confirmed Qantas’ international flights were unlikely to restart until at least July 2021, and domestic travel would be at 20 per cent of its usual levels.
The year-on-year figures reflect a promising start to the financial year prior to the pandemic – which was first identified in Wuhan, China, in December 2019.
But as the virus rapidly spread across the globe, the airline’s projected profits collapsed.
The embattled airline estimated the blow from the coronavirus pandemic is in excess of $4billion.
The airline stated this drop was a direct reflection of ‘the COVID-19 crisis and associated border restrictions’.
Qantas Group CEO Alan Joyce said the second half of 2020 was the toughest few months in the Flying Kangaroo’s illustrious 99-year history – as he called on state premiers to reconsider tough border closures.
‘The impact of COVID on all airlines is clear. It’s devastating and it will be a question of survival for many,’ he said.
‘We don’t understand why states with zero cases still have borders closed to other states with zero cases… If it’s safe, we need to reopen them.’
Mr Joyce acknowledged recovery would be ‘choppy’, citing a handful of setbacks the airline had already faced.
‘We’ve already had setbacks with borders opening and then closing again. But we know that travel is at the top of people’s wish lists and that demand will return as soon as restrictions lift. That means we can get more of our people back to work.’
Mr Joyce criticised state premiers who are refusing to give clear direction on the border closures.
‘We don’t have any determination for when the borders will reopen, we think and the federal government thinks they should reopen soon.’
‘It’s a problem for all business, it’s a problem for our business and eventually it’s going to be a problem for our economy.’
When asked whether he supported Queensland Premier Annastacia Palaszczuk’s decision to keep borders closed potentially until Christmas, Mr Joyce said he doesn’t agree with ‘blanket closures’.