Qantas CEO Alan Joyce has called for clearer guidelines around borders as he revealed 6000 jobs would go.
Qantas CEO Alan Joyce has called for clearer guidelines around borders as he revealed 6000 jobs would go.

Qantas to cut another 2500 jobs

Another 2500 jobs will go at Qantas after the company announced it plans to outsource its ground handling operations - a move that will save the airline $100 million a year.

Staff and their relevant unions were informed at 10 major airports around the country today.

Qantas and Jetstar directly employ people in various ground operations roles - which includes baggage handling and aircraft cleaning - at 11 large airports around the country.

They also use specialist ground handlers at airports at 55 other airports they fly to across Australia.

"This is the greatest challenge the aviation industry has ever faced and airlines have to change how they operate to ensure they can survive long-term," Qantas CEO Andrew David said in a statement.

He added: "We know travel restrictions will lift eventually, but the market will be very different. Every airline will come through this much leaner and more efficient, and we have to be able to compete if we're going to survive.

"Outsourcing this work to specialist ground handlers would save an estimated $100 million in operating costs each year."

Jetstar CEO Gareth Evans said contracting the work out reduces the capital spend required each year.

"As an example, Qantas and Jetstar would need to invest a further $100 million on ground handling equipment over the next five years, such as tugs and bag loaders, if the work is kept in-house," he said.

He added: "We realise this decision will be extremely difficult news for our ground handling team and their families at what is already a very challenging time".

The 10 airports that Qantas proposes to outsource this work are Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Darwin, Melbourne, Perth, Sydney and Townsville.

Qantas' review will be undertaken over the next few months.

Jetstar has decided to outsource ground handling at Adelaide, Avalon, Brisbane, Cairns, Melbourne and Sydney Domestic. Jetstar already outsources at 17 Australian airport terminals.

Qantas said in line with their enterprise bargaining agreement, affected staff will be given the option to take outsourced work.

Jetstar will provide affected staff a redundancy package and support to transition to new jobs outside the business.

These changes are in addition to job losses announced by Qantas in June due to less flying activity, which saw 775 ground handling employees request a voluntary redundancy.

They are also in addition to last week's announcement that 6000 permanent jobs will go as the airline recorded a $1.97 billion loss, with its CEO calling for clearer guidelines on border closures.

The chief of Australia's biggest airline, Alan Joyce, said results were "the sad reality" of COVID-19.

"Some carriers are shrinking their workforce by 30 per cent, 40 per cent, and even 50 per cent. Some airlines may not survive at all," Mr Joyce said during a press conference last week.

"The Flying Kangaroo wings are clipped for now, but it's still got plenty of ambition, and we plan to deliver on it. We are, and always will be, the Spirit of Australia," Mr Joyce said.

Qantas profits have plunged 91 per cent in what the premier airline has called "the most challenging period in its long history".

In its 2020 financial year results released last Thursday, the airline recorded a statutory loss after tax of $1.97 billion.

Qantas confirmed the loss of at least 6000 permanent jobs due to the ongoing financial blows caused by the coronavirus pandemic.

"For those leaving in the coming months and weeks ahead, I want to thank you sincerely for your service. It's been heartbreaking for all of us. I've seen people I've known for 20 years leave the company in the last couple of weeks, people that have served the company for over 40 years, people that, for no fault of their position or the company's position, have to leave this organisation," Mr Joyce said.

He also called for a "clear set of rules" around domestic border decisions during the coronavirus pandemic.

"At the moment, there are no rules around how borders are going to close and going to open. And it's very clear that, from a health and safety point of view, that has to be the priority," he said.

He said while it was reasonable to have international borders closed, as well as the border to Victoria which is currently battling a second COVID-19 wave, rules around how and when other states and territories opened up were needed.

"So, we have the situation where there are a large number of states and territories that have had zero cases and they're not even open to each other," he said.

"And we don't have any determination on when the borders will open. We think, and I think, the federal government thinks, they should be open soon, or now.

"But we need to have the framework for what will allow them to open, to give certainty to the tourism industry, to our company, to our employees.

"And eventually, at some stage, we know that we have to start our tourism industry again.

The country's largest airline said the near total collapse of the aviation industry had caused a $4 billion revenue plunge due to the loss of ticket sales since the end of March.

The company's loss represents a 333.8 per cent slump compared to the 2019 financial year.

Removing one-off costs and impairments, the company booked an underlying profit before tax of $124 million, a 91 per cent decline on the previous year.

"We've had to make some very tough decisions in the past few months to guarantee our future," chief executive Alan Joyce said.

"At least 6000 of our people will leave the business through no fault of their own, and thousands more will be stood down for a long time."

An additional 20,000 employees will remain stood down.

Mr Joyce said, "simply getting smaller isn't going to define success in a post-COVID world. Our new trading environment will involve an industry and competitors that are structurally different, an economy that's going to be recovering from probably a massive recession, a customer base with new expectations, and continued uncertainty on borders. We will have to operate differently in response, and that will mean more hard decisions."

Mr Joyce also said Qantas has written to state premiers and territory chief minister to seek further government support due to border closures.

"This shouldn't just be a burden on the Federal Government because in a lot of cases, the state governments are making these decisions. We think we need it in order to get through this so that we're there when the borders open up to promote tourism and generate the jobs that we know the aviation industry does."