Thousands of airport goundstaff are facing the sack as the coronavirus pandemic suffocates the aviation industry.
Ground operations company Swissport is considering cutting up to 80 per cent of its workers, including airport security staff, baggage handlers and tow truck drivers.
The company is asking the federal government for a $125 million bailout to prevent it from going under.
However, the Transport Workers' Union has warned the government against pursuing any rescue plan that did not include strict conditions on labour standards and an equity stake in the company.
TWU national secretary Michael Kaine says workers at Swissport, which is owned by a Chinese conglomerate, had suffered for years because of below award wages, gruelling split shifts and insufficient hours each month.
"There is absolutely no way the federal government should use taxpayers' money to prop up Swissport without significant conditions attached," he said on Wednesday.
"This is a company that has ripped workers in Australia off for years to the tune of millions of dollars and forced them into the most degrading working conditions."
Deputy Prime Minister and Transport Minister Michael McCormack is weighing up the bailout request.
But Treasurer Josh Frydenberg is encouraging the company to make use of the government's $130 billion wage subsidy scheme instead.
"I would say to the company to stand down, if that's what they do, or to maintain their workers and to use the JobKeeper package to keep as many of them in a job," he told ABC radio.
"It doesn't make sense for a company to terminate their employees when the government will continue to support them staying on their books, so that important employer-employee relationship is continued through this crisis."
Swissport executive Glenn Rutherford says the plight of Virgin Australia has had a knock-on effect on his company, with the airline owing several million dollars in unpaid bills.
"This will have a material impact when (the government) eventually turns the (aviation) industry back on," he told The Australian newspaper.
"As soon as they open the borders and gates, it may take months ... and all those skills and equipment will be gone. There will be a crisis in getting it back into operation."
Swissport looks after ground services and cargo handling for domestic and international airlines at airports across Australia.
Labor's transport spokeswoman Catherine King fears Swissport will be the first of many aviation businesses to go bust.
"I think this has been an extraordinary lack of leadership on the part of Scott Morrison and the Treasurer," she told Sky News.
Australian Associated Press