Qantas has notified around 2000 employees that it will move to outsource ground handling operations at 10 airports across Australia as it works to recover from the COVID crisis.
In August, Qantas advised that it needed to restructure its ground handling operations, which includes baggage handling and aircraft cleaning, and commenced a review of external bids from specialist ground handlers and in-house bids from employees and their representatives.
The bids were required to meet a range of objectives including reducing the overall cost of ground handling operations of about $100 million annually and better matching its ground handling services, and their cost, with fluctuating levels of demand.
The Transport Workers Union (TWU) submitted a bid on behalf of employees in accordance with the terms in the enterprise agreement.
Qantas said that teams from some individual airports submitted local proposals but it said that unfortunately, none of these bids met the objectives.
Qantas says it granted three separate extensions to the original deadline for the bid following requests by the TWU, doubling the total period to 12 weeks.
The airline said 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.
Qantas said that the preferred bidders are being notified today and, subject to consultation and finalizing contract terms, the transition is intended to occur in the first quarter of 2021.
As required under its enterprise agreement, Qantas will now consult with its ground handling employees and their representatives on the next steps. Affected employees will be entitled to a redundancy package and given support to transition to new jobs outside the business.
Jetstar has already transitioned its ground handling operations at six airports to external suppliers – a decision that was announced at the same time Qantas announced its review process.
Qantas Domestic and International CEO Andrew David said that “this is another tough day for Qantas, particularly for our ground handling teams and their families. We thank every one of them for their professionalism and contribution over the years supporting our customers and operations.
“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.
“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. We have a massive job ahead of us to repay debt and we know our competitors are aggressively cutting costs to emerge leaner,” Mr David said.