Qantas looked at farming out jobs

Release date: 24/10/2011

Qantas has considered plans to outsource all its ground-handling operations during this decade as part of a longer-term strategy to reshape the airline and lower labour costs.

Matt O'sullivan, The Sydney Morning Herald

Confidential documents seen by the Herald reveal that Qantas managers have discussed plans to end its ground-handling operations by 2020. The talks were part of a range of options canvassed by managers about what shape the airline should take in the longer term.

The discussions included outsourcing to labour-hire companies the loading and unloading of aircraft. This would have thrown into jeopardy the jobs of as many as 2500 Qantas workers employed primarily as baggage and ramp handlers at airports around the country.

The documents show Qantas has considered ramping up the automation of other roles such as check-in, and using technology to help reduce the need for staff at entrances to airport lounges.

But last night Qantas said it had ''absolutely no plans to outsource'' its ground-handling operations.

The corporate affairs chief, Olivia Wirth, said the company did consider a ''range of options across all areas of our business from time to time but that is not an option that is being considered or implemented''.

''Qantas doesn't use outsourcing. Qantas will continue to work with the [Transport Workers Union] and will continue to have the current arrangements that we have. There is no plan to outsource - none,'' she said.

However, the documents give an insight into the thinking of parts of Qantas management before it went into highly

charged negotiations with the unions that are representing long-haul pilots, licensed aircraft engineers and ground crew such as baggage handlers and refuellers.

The documents have been a focus of discussion at senior levels of Qantas management in the past year.

Outsourcing labour to contractors at fixed costs would help boost profitability at the company.

The airline has repeatedly said it needs to make substantial changes to its premium international operations, which lost more than $200 million last financial year.

In August Qantas announced it would cut 1000 jobs - mostly pilots, engineers and cabin crew - as part of a five-year strategic plan to turn around the fortunes of the international operations.

Qantas has already joined other airlines such as Air New Zealand in using technology such as so-called ''next-generation check-in'', which allows passengers to gain boarding passes for flights and drop off their baggage without assistance from staff.

In recent months the airline has also closed a load-control office in Melbourne, and centralised the operations in Sydney.

Most of the 60 staff affected by the closure in Melbourne will go to other jobs within the company or take voluntary redundancy.

The load-control operations are responsible for ensuring the weight and balance of aircraft are correct.

Once the dominant force in ground-handling for other airlines, Qantas has been ceding control of such services in recent years because of its marginal profitability.

It has not been pursuing new contracts, replaced by third parties such as Aerocare and Menzies Aviation.

Airlines struggle to compete against large companies such as Menzies, which have lower labour costs.

Qantas's budget offshoot, Jetstar, has a large portion of its ground-handling work carried out by labour-hire companies.

Click here to read the story on SMH website

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