Qantas has dismissed a call by the Transport Workers’ Union (TWU) for chief executive Alan Joyce to resign, off the back of 2,500 further job losses being announced by the airline.
Despite receiving more than $500 million in government support, Qantas announced on Tuesday that along with Jetstar it was reviewing whether to outsource its ground handling operations at the 10 airports where the work is done in-house, and its bus services for customers and employees around Sydney Airport.
The Qantas Group said such a move would affect 2,420 employees across Qantas and Jetstar, on top of the 6,000 job cuts already announced, and would save the group an estimated $100 million in operating costs each year.
Qantas Domestic chief executive Andrew David said the COVID-19 pandemic 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”.
“[Tuesday’s] announcement will be very tough for our hard-working teams, most of whom have already been stood down for months without work,” he said.
“This obviously adds to the uncertainty but this is the unfortunate reality of what COVID-19 has done to our industry.”
The announcement follows a net loss of $1.9 billion for the group in FY20 and a $4 billion drop in revenue in the second half of the year due to the COVID-19 pandemic and associated border restrictions.
Qantas said further significant losses are projected in FY21 and an at least $10 billion drop in revenue due to the ongoing impact of the COVID-19 pandemic.
However, the Transport Workers’ Union (TWU) described the latest decision by Qantas as “economic violence” and called for the airline’s chief executive, Alan Joyce, to resign.
“There is no dividend for the public if a company like Qantas can sack thousands of workers after receiving such financial support,” the union’s national secretary, Michael Kaine, said.
“If Alan Joyce’s only plan is to wield the axe on thousands of loyal staff, he should resign.
“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.”
It comes as the TWU today meets Qantas in court over what the union described as the airline’s “abuse” of JobKeeper payments, alleging Qantas has refused to pay workers for public holiday, weekend, overtime work and allowances by “standing people down for the rest of their pay period”.
The union also alleges Qantas is “manipulating the pay system” so that workers only receive “basic” JobKeeper payments.
The Australian Council of Trade Unions’ secretary, Sally McManus, also weighed in on the announcement of potential job cuts to ground handling operations, tweeting: “This is devastating news for workers and their families.”
According to staff emails seen by The Australian Financial Review, Joyce is reportedly back on Qantas’ payroll, earning 65 per cent of his pre-pandemic salary, while his direct reports are receiving 85 per cent of their pre-pandemic pay.
This was revealed as Qantas announced the departure of its international boss, Tino La Spina, from its executive team.
Net benefit of government support substantially lower than gross payments
Qantas dismissed any calls for the resignation of chief executive Alan Joyce, and said that while the group had received $515 million in gross government support, as outlined in its annual results released on 20 August, the net benefit to Qantas was $15 million.
A Qantas spokesman told Travel Weekly that $267 million of the government support was in the form of JobKeeper payments, most of which, he said, went directly to “our people who are stood down without work”.
The balance of that $267 million was used as a wage subsidy for those still working, while the remainder of the $515 million went to run flights on behalf of government.
These included “more than 100 international services to assist with repatriation as well as domestic flights to maintain key transport links”, services, the spokesman said, which would not have otherwise 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 spokesman told Travel Weekly.
Government support not enough to cover costs, says aviation expert
Meanwhile, University of New South Wales aviation lecturer and former Qantas chief economist Dr Tony Webber told The New Daily that the support provided to Qantas by the government was not enough to cover its costs.
When asked whether taxpayers and Qantas staff had a right to “feel duped by Qantas given the assistance it had received”, Dr Webber said: “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.
“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 added that Qantas would have considered outsourcing its ground handling operations once it realised domestic borders would remain shut for longer than expected.
Furthermore, he warned that other airlines could announce more job losses, due to the domestic market taking longer to recover.
“They would have expected business to come back a bit sooner,” Dr Webber told The New Daily.
“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.”
Featured image source: iStock/DLMcK