Qantas proposes to outsource ground handling

Qantas Group has announced a plan to review its ground handling operations at a number of Australian airports, which could affect up to 2,500 jobs at Qantas (QF, Sydney Kingsford Smith) and Jetstar Airways (JQ, Melbourne Tullamarine). The carrier holding said it would review its existing in-house ground handling operations at Adelaide, Alice Springs, Brisbane Int’l, Cairns, Canberra, Darwin, Melbourne Tullamarine, Perth Int’l, Sydney Kingsford Smith, and Townsville. It will also review other in-house or third-party options to increase the cost efficiency of these operations, with a decision due in the next few months. Should the airline choose to fully outsource them, it would affect up to 2,000 staff members, including managerial positions. Qantas estimates it could save up to AUD100 million Australian dollars (USD71.8 million) per year in operating costs through the outsourcing of its groundhandling at the selected airports. Chief Executive (Domestic) at Qantas, Andrew David, told media during a briefing that the group estimates that third-party ground handlers could provide a 40% cost reduction compared to in-house services. The airline will conduct a separate review of its bus operation at and around Sydney airport, which, if outsourced, could affect 50 jobs. In turn, Jetstar Airways said that it had already decided to outsource its ground handling operations at Adelaide, Melbourne Avalon, Brisbane, Cairns, Melbourne, and Sydney (Domestic Terminal) subject to consultation with employees and their representatives. The cuts will affect up to 370 staff. The group pointed out that besides direct savings, the outsourcing would also reduce the long-term capital investment needs.