Originally Posted by
non_state_actor
From what I have witnessed outsourcing ground staff never really works and results in many unintended problems as a result. I am sure it's cheaper on paper though.
I'm often surprised that people see this as not being inevitable. When 'cheaper' GH organisations were allowed to set up independently, many airlines jumped ship from Qantas ground handling and even Ansett ground handling at the time because while they preferred to be handled by another airline, they couldn't not do it because of the price reduction. Qantas (and even Ansett back when...) ground handling was if not profitable, very lucrative because it allowed economies of scale and for airlines like Qantas to basically largely offset their cost of their own workforce by having it subsidised by handling fees, often with the opportunity to utilise those airline's services at locations where Qantas operated (like Singapore for example or London) and obtain some sort of special rate.
Once the likes of Aerocare (Swissport), Menzies, Skystar and others emerged, the ground handling business for airlines died and has been on life support ever since. In the past, the $100M that is needed to be spent wasn't a problem because a fraction of the ground handling fees were based on equipment wear and tear, in lots of cases, the customer airlines handled were in gaps where QF had no activity, which made it worthwhile employing a FTE instead of PTE because the shift was largely paid for by the client airlines that took up the remainder of the shift time.
It surprises me that this hasn't happened earlier. Why wouldn't ANY business do this, remembering that Qantas doesn't do its own handling ANYWHERE else in the world and in many locations around Australia - the possible exception being the USA where it owns 49% of Hallmark Aviation Services.
If they were trying to destroy the product (I know no-one has said that) then they'd contract out Customer Services as well. Customer Services doesn't require hundreds of millions to be spent on GSE that is only used for Qantas and a few other airlines... one of the reasons that the independent ground handlers can do it cheaper (not just wages) is that they amortise the cost of the GSE across many clients, just like Qantas and Ansett used to do when providing ground handling and even TAA before the merger, who also handled many international carriers.