Citing the economic impact of the coronavirus (COVID-19) pandemic, Australia-based Qantas Group has announced that it is exploring a series of initiatives designed to reduce operating costs by potentially outsourcing some in-house ground operations for Qantas airlines and subsidiary Jetstar Airways. The company estimates that outsourcing ground handling and bus services at certain airports will save approximately $100 million in yearly operating costs. If enacted, the initiatives could result in up to 2,500 jobs lost on top of 6,000 positions already cut at Qantas as part of a COVID-related restructuring plan.
“We’ve already taken drastic action, with more than 220 aircraft grounded, the vast majority of our workforce stood down and assets mortgaged to raise cash,” said CEO of Qantas Domestic Andrew David. “Right now, our domestic capacity is at 20 percent of pre-COVID levels and international travel is expected to take years to recover.”
As part of its COVID-related cuts, Qantas also announced that Qantas International CEO Tino La Spina would be leaving the company. Effective Sep. 1, the responsibilities associated with his role will be transferred to Mr. David, who is also responsible for Qantas Domestic and Qantas Freight. Qantas Group reports that it has lost around $2.7 billion so far this fiscal year.
Australia is a federation of states which each have their own constitution, government and laws. This has allowed state premiers and chief ministers of territories to close their borders to outsiders, in an effort to protect their citizens from virus spread. This has decimated commercial, general aviation and the tourism industry. With no international visitors allowed in, and australian citizens barred from travelling overseas, the country is in deep recession.