Qantas: terminates 2,500 ground handling staff. Outsources 2,500 jobs

Qantas has already announced the redundancy of around 6,000 jobs and has stood down another 20,000 staff. Now it has decided to save an estimated AU$100 million a year by outsourcing its baggage handlers and cleaning staff to third party contractors, who charge lower rates.

Background

Qantas recorded a AU$2 billion loss last financial year, almost totally caused by the loss of business due to COVID-19 travel restrictions. It has stopped all international operations, and reduced domestic travel to 20% of normal, and even that level of service requires a subsidy from the federal government to keep it operational.

Cost cuts

The financial year loss has strangely concentrated managements minds to cost saving measures. Due to its industrial agreements with unions it is required to take in house efficiency suggestions from staff. Unions are skeptical about the process, suggesting that management is just going through the motions.

Qantas Domestic boss Andrew David, who has recently taken over responsibilities for Qantas International now that Tino La Spina is leaving, insists that it is a serious process, involving savings of AU$100 million a year plus longer term efficiencies.

Some of those who are losing their jobs are international baggage handlers. Given that Qantas does not expect to re-commence international services until mid 2021 – if not later, this is no real surprise.

Tough on unions

Qantas has traditionally played hard-ball with unions – think pilots strikes and the grounding of all flights back in October 2011. Needless to say, the unions – in this case the Transport Workers Union (TWU) that represents baggage handlers, is not happy. They have in fact accused Qantas of squandering the AU$500 million they have received in COVID-19 assistancef rom the federal government.

Transport workers outsourced

Strangely, most of the staff groups Qantas is planning to outsource come from the transport area; like 2,000 at Qantas and 370 ground handling staff at Jetstar. And then there are an additional 50 odd staff that drive busses for the airline. All capital city, and a few major regional centres (Alice Springs, Cairns and Townsville) are affected.

2PAXfly Takeout

The aviation industry has a difficult road ahead when it comes to sustainability. It’s going to require a relative revolution in technology, with ‘electric planes’ or hydrogen planes, or some form of jet engine that doesn’t require a carbon based fuel. And that is going to require the development of an alternative to jet engines probably.

It’s a big ask. It will take time to develop.

This move to home grown and manufactured SAF is a first step – maybe even a baby step in a very long road of innovation. In the long run, US$200 million won’t even touch the sides.

One of the things passengers – particularly premium passengers complain about is the time it takes for checked baggage – especially those bags tagged ‘Priority’ to make it to the baggage hall. With outsourced baggage handlers at the loading and unloading aircraft end and airport employed baggage sorting staff, at the airport end, Qantas is going to have even less control over delivery of your suitcase.

I’m not apposed to outsourcing in theory – just the implementation. Almost universally outsourcing means worse pay and conditions for staff, and the casualisation of workers.

It often means a loss or quality or service, as the outsourced supply company has to bid lower and lower to be successful. Think of the decline in food and beverage offerings once Q Catering was sold to Emirates associated company Dnata back in 2018.

In this era of COVID-19, its that casualisation that has shown up the cracks in our employment system. The need to work when displaying COVID-19 symptoms because of no sick pay. The need to work across several low paid jobs to make a living. The lack of appropriate training to protect workers health that has lead to COVID-19 transmission amongst security staff at quarantine hotels. Need I go on?

If you want to read further about this move, try the AFR or at ABC News or try the original Qantas release.