Qantas headquarters to stay in Sydney, Jetstar to remain in Melbourne

Qantas won significant benefits from NSW, Victoria and Queensland after a ‘competition’ for the its headquarters which ultimately amounted to little.

Qantas chief financial officer Vanessa Hudson with CEO Alan Joyce heading into the airline’s Mascot headquarters in Sydney. Picture: Flavio Brancaleone

Qantas has won significant benefits from the New South Wales, Victoria and Queensland governments in a “competition” for the airlines’ headquarters which ultimately amounted to little.

Eight months after declaring all property assets were under review, Qantas announced it would retain its Sydney headquarters in Mascot, and keep Jetstar at Collingwood in Melbourne.

About 3500 workers are based at Mascot and 750 at Collingwood.

The airline’s heavy maintenance facility would stay in Brisbane and be enhanced, taking on additional work for Jetstar currently performed in Singapore.

There was also the possibility of further maintenance work to be done in Cairns, and a new regional jet base in Townsville.

Construction of a new flight training centre with aircraft simulators will begin in New South Wales in 2023, with a Brisbane facility to begin training pilots in November this year.

The review of property began last September, on the back of the airline group’s $2.7bn statutory loss for the 2020 financial year.

Designed to seek better deals and savings for the airline group, state governments were encouraged to compete for the chance to house the flying kangaroo.

Qantas CEO Alan Joyce said they did seriously consider moving one or both of the airline group’s headquarters and “there were times in the process where that seemed to be the most likely outcome”.

“Ultimately, once the final offers were assessed on a like-for-like basis, the set of decisions we made was the most beneficial to the group overall,” said Mr Joyce.

He said each state put a lot of effort into their offers, and he thanked them sincerely.

Once agreements with each of the states was finalised Qantas could expect “a range of benefits, including payroll tax relief, tourism marketing funding, property rebates, training support and direct incentives”.

“Qantas has seen $11 billion in revenue evaporate because of state and federal travel restrictions (in the COVID crisis),” Mr Joyce said.

“Under those circumstances, we had to look seriously at every part of our business and that’s why reviewing our property footprint became part of our recovery program.

“Some of this has been about cost saving by rationalising office space and some is about unlocking the huge amount of future value that the Qantas Group will bring the local economy in the years ahead. We think that value deserves to be recognised.”

Queensland Treasurer Cameron Dick said the government considered the retention and expansion of Qantas’s Brisbane heavy maintenance facility “a win”.

“When the Qantas Group announced its review of property assets in September, we knew we were in a fight with other states who wanted to poach jobs from Queensland and I’m so pleased that our objective, to secure all the heavy maintenance jobs in Queensland has been achieved,” said Mr Dick who declined to reveal the cost to taxpayers.

He denied being disappointed that Qantas had not decided to pull up stumps in Sydney and relocate to Queensland, where the airline was founded in 1920.

“I think it was probably a big ask for Qantas to relocate its workforce at this time,” Mr Dick said.

“We’ve got the outcome we wanted – securing jobs, growing jobs in MRO (maintenance, repair and operations) in particular and that will be great for the state for many years to come.”

The Transport Workers Union demanded the New South Wales government provide full details of what subsidies it had offered Qantas to remain at Mascot, including tax waivers and direct funding.

TWU national secretary Michael Kaine said Qantas had been “playing an expensive game of ‘chicken’ and the Treasury blinked”.

“The government should release every detail about this special deal immediately. If taxpayers are paying for it, taxpayers have a right to see it,” Mr Kaine said.

“Qantas has been given $2 billion by the federal government and appears to be getting some state governments to write blank cheques for it too. We demand full disclosure on what this involves.”

Qantas also confirmed Sydney as the launch city for the airline’s ambitious Project Sunrise flights, which will carry passengers non-stop to London, Paris and New York.

The timing of the flights will depend on the recovery of international travel, currently not expected before 2024.

The Qantas HQ at Mascot in Sydney. Picture: Justin Lloyd

Qantas flagged the expansion of its Loyalty business at Mascot, and the development of a comprehensive indigenous and diversity employment program in Sydney.

Discussions with state and federal governments were also looking at accelerating the development of a sustainable aviation fuels facility, for which Qantas has committed $50m over the next decade.

Originally published as Qantas headquarters to stay in Sydney, Jetstar to remain in Melbourne