Qantas is planning to cut up to 2500 more workers at airports across Australia, adding to the 6000 employees already leaving the airline.
Management on Tuesday told staff it is looking to outsource ground handling crew, who handle baggage, cleaning and other work for Qantas and Jetstar.
The move would save Qantas $100 million per year as the travel industry remains devastated by the coronavirus pandemic.
The group in June sacked 6000 workers as part of a three-year plan to slash costs by $15 billion. It raised $1.36 billion from institutional investors in June, and $71.7 million from retail investors in August.
While Qantas and Jetstar have their own ground staff at major airports, the proposal aims to use external specialists who provide the services at other airports.
Qantas would outsource the ground handling work at 10 airports: Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Melbourne, Darwin, Perth, Sydney and Townsville.
About 2000 jobs would be affected by the move.
Jetstar will also outsource ground handling at six airports - Adelaide, Avalon, Brisbane, Cairns, Melbourne and Sydney Domestic - impacting about 370 jobs.
A plan to outsource bus services in and around Sydney Airport could also lead to 50 job losses.
Qantas employees will have a chance to bid for the work as part of the enterprise bargaining agreement.
Qantas Domestic chief executive Andrew David is keen to negotiate with workers, but said the specialist ground handlers' scale of operations across many airports provided cost advantages.
"The numbers are confronting. We're talking a 40 per cent (cost) difference," he said.
Staff at Jetstar will not be able to bid for work, as it has a different industrial relations arrangement.
Jetstar group chief executive Gareth Evans said the outsourcing proposal was not part of Qantas' broader changes announced in June as management was still building a plan.
"This is an evolving and changing plan, but the steps are necessary," he said.
Mr David was asked by media whether the group may outsource other roles, such as cabin crew and pilots.
However, he said ground handling was a unique field and had suppliers who were able to service many airports.
Mr David said the group was due to lose $10 billion this financial year, and outsourcing was one way to address the situation.
"We know travel restrictions will lift eventually, but the market will be very different," he said.
"Every airline will come through this much leaner and more efficient, and we have to be able to compete if we're going to survive."
The Transport Workers Union demanded Qantas boss Alan Joyce stand down over the job cuts, saying: "This is not shrewd management, it is economic violence."
"Qantas has taken millions in JobKeeper wage subsidies, more than any other company, with the express intent of keeping people employed," TWU National Secretary Michael Kaine said in a statement.
"But now Alan Joyce wants to destroy thousands more livelihoods. This is callous abuse of public money. The chief executive must resign."
Qantas received $515 million in government support, according to a spokesman.
Most of this support was via JobKeeper ($267 million), which had largely gone to stood down workers.
The rest of the funds helped bring Australians home from overseas and provide critical services.
Mr David said the call for Mr Joyce to leave was not worthy of a response.
Shares in the airline were higher by 2.41 per cent to $3.82 at 3.30pm.