Qantas Group has announced a plan to review its ground handling operations at a number of Australian airports, which could affect up to 2,500 jobs at Qantas (QF, Sydney Kingsford Smith) and Jetstar Airways (JQ, Melbourne Tullamarine).

The carrier holding said it would review its existing in-house ground handling operations at Adelaide International, Alice Springs, Brisbane International, Cairns, Canberra, Darwin, Melbourne Tullamarine, Perth International, Sydney Kingsford Smith, and Townsville. It will also review other in-house or third-party options to increase the cost efficiency of these operations, with a decision due in the next few months. Should the airline choose to fully outsource them, it would affect up to 2,000 staff members, including managerial positions. Qantas estimates it could save up to AUD100 million Australian dollars (USD71.8 million) per year in operating costs through the outsourcing of its groundhandling at the selected airports.

Chief Executive (Domestic) at Qantas, Andrew David, told media during a briefing that the group estimates that third-party ground handlers could provide a 40% cost reduction compared to in-house services.

The airline will conduct a separate review of its bus operation at and around Sydney airport, which, if outsourced, could affect 50 jobs.

In turn, Jetstar Airways said that it had already decided to outsource its ground handling operations at Adelaide, Melbourne Avalon, Brisbane, Cairns, Melbourne, and Sydney (Domestic Terminal) subject to consultation with employees and their representatives. The cuts will affect up to 370 staff.

The group pointed out that besides direct savings, the outsourcing would also reduce the long-term capital investment needs.

"Contracting this work out also reduces the capital spend required each year. As an example, Qantas and Jetstar would need to invest a further AUD100 million on ground handling equipment over the next five years, such as tugs and bag loaders, if the work is kept inhouse," Jetstar Group Chief Executive Gareth Evans said.

Jetstar outsources ground handling operations at the remaining airports in Australia which it serves on a scheduled basis. In turn, Qantas currently has in-house ground handling operations at all airports it serves in Australia, including 55 smaller airports where it employs specialist ground handlers with limited roles.