Qantas considering moving headquarters

Sydney-headquartered Qantas is thinking of pulling up stumps at Mascot and moving interstate to save money.

Qantas aircraft parked at Sydney Airport. Picture: NewsWire/Flavio Brancaleone

Qantas is asking state governments what they are prepared to offer to accommodate the airline, as it considers pulling up stumps on its Sydney headquarters to save money.

An expressions of interest process has been initiated by the group with all states, as part of a review of its lease arrangements which cost $40m a year.

Despite being established in Queensland as the Queensland and Northern Territory Aerial Service in 1920, the airline has called Sydney home since 1938.

The group relocated to its current offices at Mascot in the 1990s, where it has 49,000 sqm of space and about 5000 staff.

Jetstar has its own head office in Collingwood, Melbourne, where 1000 employees are based, and Qantas heavy maintenance facilities are in Brisbane, employing 750 people.

Chief financial officer Vanessa Hudson said the company would consider bringing some or all facilities together.

“Like most airlines, the ongoing impact of COVID means we’ll be a much smaller company for a while. We’re looking right across the organisation for efficiencies, including our $40 million annual spend on leased office space,” Ms Hudson said.

“As well as simply right sizing the amount of space we have, there are opportunities to consolidate some facilities and unlock economies of scale. For instance, we could co-locate the Qantas and Jetstar head offices in a single place rather than splitting them across Sydney and Melbourne.”

She said anything that could “reasonably move without impacting operations or customers” was on the table as part of this review.

“We’ll also be making the new Western Sydney Airport part of our thinking, given the opportunity this greenfield project represents,” said Ms Hudson.

“This is about setting the Qantas Group up for the long term as well as recovering from the COVID crisis. And we’re open minded about the outcome.”

The news comes a day after Qantas rival Virgin Australia Virgin Australia warned its recovery plans had been “severely impacted” by Victoria’s COVID-19 problems and ongoing border closures, and it was likely to make up to 250 head office positions redundant.

Although it was possible the Qantas headquarters remained at Mascot, Ms Hudson said it could wind up with a single, all-purpose campus that brought together many different parts of the group.

“These are all options we need to consider as we look to the future,” she said.

“The Qantas Group will remain one of the country’s largest employers and a major generator of economic activity, so we’re keen to engage with state governments on any potential incentives as part of our decision making.”

Victorian Premier Daniel Andrews revealed he had already spoken to Qantas CEO Alan Joyce about the “substantial prospects” for the airline relocating to Melbourne.

“We think that we have a very attractive offer to make and we’ll work through that to try to have as many jobs as we possibly can in our city and state,” Mr Andrews said.

“It was a very, very productive discussion last night.”

New South Wales Treasurer Dom Perrottet said the government wanted to keep as many jobs as possible in the state.

“We have 10,000 jobs with Qantas here in NSW and we obviously want to keep as many of them as possible,” Mr Perrottet said.
“This is going to be a very difficult time but we’ve previously worked with Virgin and we will work with Qantas as well.

“Success looks like keeping as many people who are employed by Qantas in a job in this pandemic.”

The Queensland Government which has already pledged $200m to Virgin Australia to retain its Brisbane headquarters was also interested in Qantas.

Treasurer Cameron Dick said Queensland was the reason there was a “Q” in Qantas.

“We’re more than happy to sit down with Qantas and talk about opportunities to support more jobs in Queensland,” Mr Dick said.

“The Palaszczuk Government has built a strong relationship with Qantas to attract job-creating projects to Queensland, including the Qantas Group Pilot Academy at Toowoomba and the Qantas 787 Dreamliner base in Brisbane.”

Colliers International had been appointed to sublease about 25,000 sqm of surplus office space across Mascot, Melbourne and Hobart.

The Mascot headquarters which house about 5000 staff, is owned by the listed Cromwell Property Group and Qantas will look to sublease two of the four buildings which currently house its remaining staff while keeping the head lease for another 12-years.

The airline is pitching the buildings as being available for sublease at competitive prices. Michael Crombie and Neil Murray of Colliers International have been appointed to sublease up to 20,000 sqm of space across two stand-alone buildings at 10 Bourke Road in Mascot, South Sydney.

Forming part of the headquarters of Qantas Airways, the buildings have recently been refitted.

There is 14,690 sqm of office space across six levels available in one building, with the ability to lease each floor separately, while 5036sq m of space is for lease across another building across two levels in the building next door, which will be leased in one line.

“These are two of the best buildings in Mascot, occupied and recently refurbished to a very high standard for one of Australia’s leading companies, and are now being offered at highly competitive rates of around $450 per sqm gross effective rent,” Mr Crombie said.

As well as the Sydney properties, Colliers has appointed to market two other locations including 2000sq m of space in a tower at Melbourne’s 333 Collins Street. There is also 1500 sqm available at the Qantas Premium Contact Centre in Hobart for a call centre style of operation at a reduced start-up cost.

Other airlines have already shaken up their property holdings. In July, Virgin Australia staff in Brisbane were told the airline would leave its Bowen Hills “Virgin Village” that was owned by a Charter Hall-run trust.

The carrier has now shifted to five floors at South Bank’s Southpoint tower complex, which houses the global headquarters of Flight Centre and the Emporium Hotel.

Qantas is in the process of cutting 6000 of its 29,000 strong workforce, and is also considering outsourcing 2420 ground-handling jobs at 11 airports.

In August the airline group announced a $2.7bn before tax loss for the 2020 financial year and warned of another significant loss in 2021.