QANTAS: to start state bidding war for headquarters?

Qantas is conducting a group wide property review of its rented space, especially its corporate offices, and may amalgamate some facilities. It is also inviting ‘expressions of interest’ from state governments for incentives to influence its decision.

Crafty Qantas

Qantas has always been canny in its public relations, and mostly with its political lobbying. This move is sending a clear message to state governments – particularly along the eastern seaboard (Brisbane, Sydney and Melbourne) – that if they want Qantas to stay, then they need to stump up some cash.

Qantas 2 years ago got some financial support from the Queensland government to open a AU$35 million flight school in Toowoomba. Now it’s targeting other states for the retention or move of its headquarters. It could also be targeting the federal government to become a base tenant of the new Western Sydney Airport to open in 2026.

Co-location

Currently, Qantas is headquartered in the suburb of Mascot adjacent to the airport in Sydney, with Jetstar’s head office in Melbourne. An obvious move would be to co-locate them – probably in Sydney, but maybe in Melbourne.

This will not be the first time Qantas has changed the location of its headquarters. Over the years it has moved from Winton (1920), Longreach (1921) and Brisbane (1930) in Queensland through various parts of the Sydney CBD (1938 – 1982) until its current base at Mascot. Jetstar moved from Sydney to Melbourne in 2004.

“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.Vanessa Hudson, Chief Financial Officer for the Qantas Group

Cost cutting

Office space and the general rationalisation of property is an obvious move for a reduced size post COVID-19 Qantas looking to eliminate a billion dollars of operating costs in the next 12 months.

With a drop of about 25% in their office staff, Qantas does have an excess of space, and has engaged Colliers International to negotiate subleasing in Sydney, Melbourne and Hobart

2PAXfly Takeout

Wise move Qantas!

The feeding frenzy has already begun with state premiers Gladys Gladys Berejiklian of NSW and Danial Andrews of Victoria already claiming to have spoken with Alan Joyce, Qantas CEO. Queensland Treasurer Cameron Dick (you’d change it wouldn’t you?) is appealing to history and sentimentality with the claim that “Queensland is the reason there’s a ‘Q’ in Qantas.” Even Steven Marshall, Premier of South Australia has set up a task force! Talk about a long shot!

With Sydney wanting to retain the headquarters, the new Western Sydney Airport needing some anchor tenants and a virus laden Melbourne with a tanking economy eager for some economic stimulus, now is the time to hold out the corporate paw to governments – also known as taxpayers – for a handout.

Just remember Australians, they are reaching into your pockets.