Qantas has notified around 2000 employees that it will move to outsource ground handling operations at ten airports across Australia as it works to recover from the COVID crisis.
In August, the airline announced its reasons for needing to restructure its ground handling operations, which included 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 the following objectives:
– Reducing the overall cost of ground handling operations (as Qantas anticipated it could save approximately AU$100 million annually, based on pre-COVID levels of flying, through the use of third-party providers)
– Avoiding large spending on ground handling equipment such as aircraft tugs and baggage loaders (AU$80 million over five years).
– Better matching its ground handling services and cost, with fluctuating levels of demand.
The Transport Workers Union (TWU) submitted a bid on behalf of employees in accordance with terms in the enterprise agreement. Teams from some individual airports submitted local proposals. Unfortunately, none of those bids met the objectives.
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 AU$103 million. The preferred bidders are in the process of being notified and, subject to consultation and finalizing contract terms, transition is intended to occur in the first quarter of 2021. (US$1.00 = AU$1.36 at time of publication.)
