Coronavirus: Ground handlers’ dire warning for aviation

An alliance of aviation companies says the COVID-19 economic recovery could be stalled and airlines grounded.

Transport Minister Michael McCormack. Picture: Adam Yip

An alliance of aviation companies responsible for almost 75 per cent of airport ground handling operations said the COVID-19 economic recovery could be stalled and airlines grounded after the sector was locked out of a $1bn bailout package.

The group, which represents the bulk of Australia’s baggage handling, passenger check-in, aircraft safety, engineering and security operations, claimed 6000 jobs would be lost after September without assistance.

The Australian understands executives from six ground handling companies raised their concerns with Deputy Prime Minister and Transport Minister Michael McCormack three weeks ago.

Mr McCormack is believed to have told the companies the airlines, including Qantas, should have been passing on the funding from the aviation package from which the ground handling companies were excluded.

The executives warned that planes would not be able to fly without the critical ground operations, which also extended to aircraft towing, control tower communications and aircraft inspections, with the potential to stall the broader reopening of domestic air travel.

With the return of some flights into Queensland following the reopeningopening of its border with NSW, the ground handling operations for these flights were being partly subsidised by the federal government’s $70bn JobKeeper scheme. But the companies claimed that the volumes were far too low for them to cover the ongoing fixed and operational costs.

Mr McCormack was first alerted to the issue in April by the foreign-owned Swissport, which had warned that its business would fail within months if it was not given access to the aviation fund.

An alliance has now been formed between the six major ground handling companies, three of which are Australian-owned businesses, including Aus Flight Handling, Oceania and NTL Aviation Services. Two major international companies, the UK-based Menzies and US firm Precision Aviation, also have joined the Australian Aviation Ground Handlers Industry Alliance.

Managing director of Oceania and spokesman for the group Bruce Stokes said the sector had been excluded from the $1bn aviation fund, which was restricted to airlines. “Without the aviation ground handling sector, planes cannot fly,” Mr Stokes said.

“We may not be as well-known as the airlines, but we are the ones doing plenty of the heavy lifting.

“We need clarity and support from government. Without aviation ground handling staff, there are no flights.

“We acknowledge the government’s JobKeeper program, which has helped sustain thousands of aviation jobs during the pandemic. However, the contraction of the aviation ground handling sector once JobKeeper concludes, and the loss of technical skills, will have a domino effect on the broader economy and curtail national economic growth for months and years longer than necessary.”

Mr McCormack said support for the ground handlers would come from getting more aircraft into the air. “All industries have been hit hard by the pandemic, arguably none more so than aviation,” Mr McCormack said. “One of the key forms of support for the aviation sector is to get aircraft moving again. As border restrictions ease and the demand for air travel increases, airlines and operators will increase capacity and demand for enabling infrastructure such as ground support services will increase.”

But Mr Stokes said that the air traffic volumes would have to increase to 90 per cent if the ground handling companies were to remain viable beyond September.