Qantas keeps headquarters for state subsidies

Company News

by Melissa Darmawan

Qantas (ASX:QAN) will continue its head office in Sydney and maintain their Jetstar operations in Melbourne following the start of their property footprint review in September 2020. The company has committed to keeping their heavy maintenance facility in Brisbane and establish a new flight training centre with aircraft simulators in NSW from 2023.

Their review was in the wake of their $2.7 billion loss in FY20 due to international and state travel restrictions as a result of the covid-19 pandemic. Qantas is expecting to receive government financial incentives from its respective states once agreements are finalized.

Qantas CEO Alan Joyce said the “aviation has probably taken the biggest hit of any industry from the COVID crisis, and Qantas has seen $11 billion in revenue evaporate because of state and federal travel restrictions”.

“Moving one or both of our headquarters was always a live option 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”.

Sydney will also be the launch city for the flying Kangaroo’s first non-stop flights to cities such as New York and London called the 'Project Sunrise', once international travel resumes.

Though a challenge for the flying Kangaroo airline is the ACCC’s proposal to knock back the plan for Qantas and Japan Airlines to coordinate flights, as the watchdog claims it breaches competition laws. The airlines announced in December last year to form a partnership to service flights between Australia, New Zealand and Japan to support the tourism industry. The ACCC is seeking submissions from interested parties in response to this draft by 27 May 2021. 

Shares in Qantas are trading 1.14 per cent lower at $4.76.

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