Shots fired by NSW Premier in battle to keep Qantas in Sydney

 

Premier Gladys Berejiklian has fired the first salvo in the battle for Qantas, declaring a relocation to Queensland would be a "huge risk" given the state's work to "cripple the tourism industry" with border closures.

NSW will enter a major bidding war with other states - possibly offering payroll tax incentives - to secure Qantas and Jetstar headquarters at the western Sydney aerotropolis, after the air group made the shock announcement it was reconsidering and consolidating all of its leasing space.

At stake are the 5000 Qantas jobs already at Mascot, the 1000 Jetstar jobs in Melbourne and 750 maintenance jobs in Brisbane all on the table for relocation.

The Qantas group's nationwide review of its rental space will particularly focus on corporate offices but could also consider aviation facilities if they can be consolidated on shore.

 

Premier Gladys Berejiklian and Treasurer Dominic Perrottet will work to keep Qantas in Sydney. Picture: NCA NewsWire/James Gourley
Premier Gladys Berejiklian and Treasurer Dominic Perrottet will work to keep Qantas in Sydney. Picture: NCA NewsWire/James Gourley

 

The group will throw open an expression of interest process to state governments, sparking a full-scale bidding war over a three month timeline.

Ms Berejiklian declared to The Daily Telegraph: "Sydney is the natural choice for Qantas, and I'm hopeful our iconic national airline makes the decision to call NSW home."

"Given Queensland's stubborn decision to close the borders and cripple the tourism industry, basing a company that relies on travel there would be a huge risk in the future."

Ms Berejiklian has instilled Treasurer Dominic Perrottet with the task of keeping the headquarters in Sydney.

"Sydney's role as Australia's only global city and the first port of call for business and tourism is already well established, and it will be further boosted in 2026 when the 24-hour Western Sydney International (Nancy-Bird Walton) Airport opens," Ms Berejiklian said.

Qantas is throwing open an “expression of interest” process to state governments, likely sparking a full scale bidding war. Picture: NCA NewsWire/Flavio Brancaleone
Qantas is throwing open an “expression of interest” process to state governments, likely sparking a full scale bidding war. Picture: NCA NewsWire/Flavio Brancaleone

One live option which has caught the airline's attention has been to consolidate both Qantas and Jetstar headquarters at the new Western Sydney aerotropolis. But equally, Sydney is at risk of losing both HQs to other states.

Both Victorian Premier Dan Andrews and Queensland Treasurer Cameron Dick signalled an intent to push for the airline's headquarters.

A December 2019 report by Deloitte Access Economics estimated that NSW received the largest share of Qantas groups' direct economic contribution to Australia with $3.6 billion in value added to the economy.

All elements of the Qantas group combined contributed $1.6B to the Victorian economy and $1.4B to Queensland.

These figures will have shrunk in the pandemic and not all of the financial contribution is tied to the elements of the business up for relocation - but a significant portion is and could be transferred to NSW should the government win the bidding war.

 

Both Qantas and Jetstar offices could be located at the under-construction western Sydney airport. Picture: Toby Zerna
Both Qantas and Jetstar offices could be located at the under-construction western Sydney airport. Picture: Toby Zerna

 

Qantas currently leases a 49,000 square metre head office at Mascot in Sydney and Jetstar leases head office space in Collingwood, Melbourne.

Flight simulator centres in Sydney and Melbourne will also be considered for relocation as will maintenance facilities in Brisbane.

In the first steps of the process, Colliers International has been appointed to sublease about 25,000 square metres of surplus office space across Mascot, Melbourne CBD and Hobart.

A lease on a 230 square metre Sydney CBD office that is due to expire in October will not be renewed.

Qantas spends $40 million a year on leased office space. It is signed to the Mascot site until 2032, but is willing to sublease the premises for a better deal elsewhere.

Chief Financial Officer for the Qantas Group, Vanessa Hudson, said: "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."

 

The flying kangaroo is looking at all its options. Picture: Christian Gilles
The flying kangaroo is looking at all its options. Picture: Christian Gilles

 

She said one option could be to "co-locate the Qantas and Jetstar head offices in a single place rather than splitting them across Sydney and Melbourne".

"Anything that can reasonably move without impacting our operations or customers is on the table as part of this review.

"It's possible that our HQ stays where it is but becomes a lot smaller, and other facilities consolidate elsewhere. Or we could wind up with a single, all-purpose campus that brings together many different parts of the Group. These are all options we need to consider as we look to the future."

Steve Purvinas, federal secretary of the Australian Licenced Engineers Association accused the airline of "trying to play one state government off against another in order to get handouts".

"There is no reason to move its headquarters out of Mascot and its maintenance facility in Brisbane is world class."

Originally published as Shots fired by Premier in battle to keep Qantas in Sydney


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