Qantas promises more international flights from Perth after new deal with airport

Qantas and Perth Airport have buried the hatchet with a 12-year deal which will see the airline get a brand new terminal by 2031.

The more conciliatory style of management adopted by new Qantas chief executive Vanessa Hudson appears to be paying off, with the airline’s former foe Perth Airport agreeing to build the airline a new terminal.

After years of legal disputes over terminals and fees, Qantas and Perth Airport announced a 12-year agreement had been reached that would see investment of $3bn in new terminal facilities and a new parallel runway.

The deal will significantly benefit Qantas, with Perth Airport also agreeing to an upgrade of the airline’s existing home in terminals 3 and 4 given that the new digs were unlikely to be ready before 2031.

Qantas CEO Vanessa Hudson said “the largest airport infrastructure deal” in the airline’s history would create a world-class western hub and allow a huge expansion of domestic and international services.

“We’ve always wanted to see a resolution to the disputes we’ve had with Perth because we believe in the gateway and we believe in the growth,” said Ms Hudson.

“Perth-London and Perth-Rome are two of the most popular flights on our international network, which gives us confidence in our strategy to ramp up WA flying over the next few years as we receive new aircraft and grow our fleet.”

The announcement followed a long running legal stoush between Qantas and Perth Airport, centred on $11m in unpaid aeronautical fees.

In 2019, the airport accused Qantas of charging passengers the full aeronautical fee and then failing to pass it on due to a disagreement about terminals.

Qantas had claimed Perth Airport had failed to reimburse them for terminal 4 which it was contractually obliged to hand back to the gateway.

After an often bitter trial, the West Australian Supreme Court ultimately ruled in favour of Perth Airport, ordering Qantas to pay part of what was owed.

Perth Airport CEO Jason Waters said the deal announced on Friday created “a new basis” for the relationship with Qantas, which would help fund the development through aeronautical fees.

“We’ve got to complete a similar suite of arrangements with a range of other airlines, albeit nowhere near as complex as this one, but the importance of this is that from our perspective it now commits us and enables us to move forward,” Mr Waters said.

“Qantas is our biggest customer and Qantas passengers account for 50 per cent of the people who use Perth Airport.”

As well as the new terminal and parallel runway, Perth Airport was planning further investment in multistorey carparks, a hotel and enhancements to the road network in a total expenditure of $5bn.

By 2031, Qantas and partner Jetstar expected to add 4.4 million more seats on flights in and out of Perth, and new routes into Asia, Africa, India and Europe.

From July, Perth-Paris flights would begin, and Qantas also flagged its intention to add services to Auckland and Johannesburg from mid-2025, subject to meeting border agency requirements.

The new-found friendship with Perth Airport was further evidence of the conciliatory approach being taken by Ms Hudson since she took over from the more combative Alan Joyce in September last year.

As part of her commitment to restoring trust in Qantas, Ms Hudson was endeavouring to put past conflicts behind them and recently reached a settlement with the consumer watchdog over the sale of tickets on already cancelled flights.

Investors reacted positively to the Perth Airport announcement, with the Qantas share price closing up 2c at $6.09.

RWC Capital Partners analyst Owen Birrell said it was a “mutually beneficial solution to a long-running dispute”.

“Longer-term, the 12-year duration (of the agreement) provides a clear pathway for future growth and allows both parties to align their respective investment intentions,” said Mr Birrell.

Inside Perth Airport.

Originally published as Qantas promises more international flights from Perth after new deal with airport