Aviation services company Swissport is calling on a bailout of $125 million from the federal government, off the back of Virgin Australia being placed into administration.
Swissport, which is owned by Virgin Australia’s 20 per cent shareholder HNA, has warned as many as 2,000 workers (80 per cent of its workforce) could be let go if it does not receive immediate taxpayer-funded relief.
The Australian government had announced $165 million worth of funding to help keep Virgin and Qantas flying domestically, on top of a $715 million relief package for Aussie airlines announced last month, as well as a $300 million lifeline for the regional aviation sector.
However, according to Swissport, these benefits have bypassed ground handling staff entirely.
“Currently, we are paying more in staff car parking and airport fees than we earn by servicing flights in Australia,” the company’s executive vice president for the Asia Pacific, Glenn Rutherford, said.
“We are desperately seeking financial support from the Australian government of about $125 million for a package of tax relief, creditor protection, loans, and further wage support.”
Rutherford added that while the JobKeeper package was welcome across the broader community, aviation is likely to be one of the last industries to have restrictions lifted, meaning the six-month package would not be able to sustain jobs.
Going into the COVID-19 crisis, Swissport’s Australian operation was profitable, Rutherford said. According to News Corp, the company has $165 million of debt, on which it pays 6.9 per cent interest.
Swissport said it would be forced to progressively sell-off its hundreds of millions of dollars worth of aircraft handling equipment in the coming months, if the liquidity crisis continues.
Virgin Australia CEO Paul Scurrah told ABC Radio: “Providers like Swissport are very, very important to getting us back up and running.”
However, Swissport has been accused of misrepresenting its role in the Australian aviation industry.
Aviation consultant Neil Hansford told The Australian companies like Qantas Handling, dnata and Menzies could replace Swissport tomorrow.
“It’s not as if it’s even a duopoly. There are plenty of players,” Hansford told the outlet.
Transport Minister Michael McCormack told News Corp he would hold a teleconference with Swissport on Friday.
“I’m happy to hear them out,” McCormack said.
However, he noted the precedent set when the government said it would not bail out Virgin Australia.
“You can’t apply one principle to Virgin and a different principle to another company in the same industry.”
Unions have also been quick to advise caution on any action to help the company.
The Transport Workers’ Union (TWU) has warned the government against any rescue plan for Swissport without strict conditions on labour standards and an equity stake in the company.
“There is absolutely no way the federal government should use taxpayers’ money to prop up Swissport without significant conditions attached,” TWU national secretary Michael Kaine said in a statement.
“This is a company that has ripped workers in Australia off for years to the tune of millions of dollars and forced them into the most degrading working conditions.
“The government must take a stake in Swissport and supervise strict lifting of labour standards.”
The union has also called for a clean-out of Swissport’s regional senior management team, who has “for years devised and overseen the exploitation of workers in Australia”.
“The federal government must work out a national plan on aviation, which takes into account the fragmented landscape including the airlines and companies like Swissport which service them,” Kaine said.
“All aviation companies are in crisis right now and the government must devise a strategy for the thousands of workers who depend on them.
“After this crisis, we need a new type of aviation industry where standards are lifted and where good jobs and a reliable service for the travelling public are prioritised.”
It comes after ground workers last year rallied against “unsafe and unfair” working conditions at airports, aiming their frustrations at companies like Swissport/Aerocare.
The Fair Work Commission two weeks earlier had terminated the 2012 Swissport/Aerocare enterprise agreement under which employees were being paid below award rates.
The agreement had allowed the company to roster workers for as little as three hours and forced them to work split shifts. This meant that a worker could be on duty for 12 hours and only receive six hours’ pay.
It followed the release of shocking footage by the TWU in June last year of what it said were the working conditions of Aerocare staff during split shifts, which you can view here.
Featured image: iStock.com/Cineberg