Unions are calling on Qantas CEO Alan Joyce to resign after the airline flagged another 2500 potential job losses, despite receiving more than $500 million in government support.
Industry insiders say more job losses are on the cards at other airlines, too, as domestic borders have remained closed for longer than expected.
Qantas announced on Tuesday that along with Jetstar it was reviewing whether to outsource its ground handling operations at the 10 Australian airports where this work is done in house.
The national carrier said such a move would affect up to 2420 workers across both brands, on top of the 6000 who have already lost their jobs, and would save the group $100 million in operating costs every year.
Qantas Domestic CEO Andrew David said the announcement “will be very tough for our hard-working teams, most of whom have already been stood down for months without work”.
“But this is the unfortunate reality of what COVID-19 has done to our industry,” Mr David said.
“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 is burning through $40 million a week at the moment and last financial year reported a statutory loss of $2.7 billion.
The airline is operating at 20 per cent of its usual capacity and suffered a $4 billion drop in revenue in the second half of FY20, thanks to COVID-19 and associated border restrictions.
But unions said its latest move was unforgivable.
The Transport Workers Union called for Mr Joyce to resign after it said the airline had “squandered” $515 million in government support and still sacked thousands of workers.
The union’s national secretary Michael Kaine said there was “no dividend for the public if a company like Qantas sack thousands of workers after receiving such financial support”.
If Alan Joyce’s only plan is to wield the axe on thousands of loyal staff, he should resign,” Mr Kaine said.
“This is not shrewd management, it is economic violence. Qantas has taken millions in JobKeeper wage subsidies, more than any other company, with the express intent of keeping people employed.
‘But now Alan Joyce wants to destroy thousands more livelihoods. This is callous abuse of public money. The chief executive must resign.”
According to staff emails seen by the Australian Financial Review, Mr Joyce is back on the payroll and earning 65 per cent of his pre-pandemic pay, after forfeiting his salary for three months when the pandemic first hit.
A Qantas spokesperson told The New Daily that TWU was wrong to claim Qantas had “squandered” hundreds of millions of government support.
Though it’s true that the airline received $515 million from the government, as outlined in its annual results on August 20, the spokesperson said the net benefit to Qantas from this support was only $15 million.
Qantas received $267 million in JobKeeper payments, most of which went directly to stood-down employees, and another $248 million in public funding to operate flights on behalf of government.
This included “more than 100 international services to assist with repatriation as well as domestic flights to maintain key transport links – services that would not otherwise have been commercially viable”.
“When we announced all these figures on 20 August, the TWU issued a statement (here) to say that Qantas in fact needed MORE support from government,” the spokesperson said.
Asked whether taxpayers and Qantas employees had a right to feel duped by Qantas given the assistance it had received, University of New South Wales aviation lecturer and former Qantas chief economist Dr Tony Webber said the support given was not enough to cover its costs.
“Over a year [Qantas] would have fixed costs of probably one and a half to two billion dollars, so the government support, while I suspect it’s appreciated, is just not enough,” Dr Webber told The New Daily.
“If you look at what Lufthansa is receiving and what Singapore Airlines is receiving, then what Aussie airlines are getting just pales in comparison.”
Dr Webber said Qantas would have considered outsourcing its ground handling operations once it realised domestic borders would remain shut for longer than expected.
He warned other airlines could also announce more job losses, as the domestic market was taking so long to recover.
“They would have expected business to come back a bit sooner,” Dr Webber said.
“So you might see some announcements from Virgin and Rex if Victorian, Queensland and New South Wales borders remain closed for the next month – I don’t think they expected that, so that’s a possibility.”