- Group-wide property review of its rented space, particularly corporate offices.
- Some aviation facilities may move if opportunities to consolidate on-shore.
- Part of the Group’s overall ‘reset’ and recovery plan in response to COVID crisis.
- Expression of interest process for state governments
The Qantas Group is reviewing the location of its key facilities as part of its recovery plan and efforts to cut overheads – which may result in bringing together several facilities, currently spread across Australia, in one state.
The review will focus chiefly on non-aviation facilities – including the national carrier’s leased 49,000 square metre head office in Mascot (Sydney) and Jetstar’s leased head office in Collingwood (Melbourne).
Some aviation facilities will be considered for possible relocation, such as flight simulator centres currently in Sydney and Melbourne as well as Qantas’ heavy maintenance facilities in Brisbane – particularly if there was an opportunity to bring some or all of these facilities together elsewhere within Australia.
There are no intentions to offshore facilities as a result of this review and it is not expected to have any impact on customers. Rather, the review flows from job losses already announced, (about 25 per cent of which were corporate and head office employees) the need for more efficiencies and setting the Group up for the future.
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, including our $40 million annual spend on leased office space.
“As well as simply rightsizing 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.
“Most of our activities and facilities are anchored to the airports we fly to, but anything that can reasonably move without impacting our operations or customers is 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.
“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. 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.
“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,” added Ms Hudson.
To assist with the first phase of consolidation, 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.
The review is expected to take three months to determine preferred options. Any relocations are likely to be staggered over time (potentially years) dependent on what options are taken up.
SHORT HISTORY OF QANTAS’ HEAD OFFICE MOVES
1920 – Winton, Queensland
1921 – Longreach, Queensland
1930 – Brisbane, Queensland (various locations including the Wool Exchange Building)
1938 – Sydney CBD (Shell House, near Wynyard Station, which became part of the Menzies Hotel)
1957 – Sydney CBD (Qantas House, 1 Chifley Square)
1982 – Sydney CBD (Qantas International Centre, now Suncorp Place, on Grosvenor and Lang Streets)
1990s – Gradual shift over several years to current offices at Mascot, Sydney. This included relocation of Australian Airlines from Melbourne to Sydney after the merger with Qantas in 1993.
2004 – Jetstar relocates from Sydney to Melbourne