Melbourne Airport and the Qantas Airways (ASX: QAN) have locked in a long-term commercial agreement that will underpin a major expansion of the airport's international terminal, delivery of a third runway and significant upgrades to lounges and check-in facilities.
The deal includes a 15-year commitment from Qantas to Melbourne Airport's third runway, which is scheduled to open in 2031.
Melbourne Airport's international terminal expansion program is valued at $4.5 billion and will deliver five additional widebody aircraft gates, expanding capacity for long-haul services.
As part of the agreement, Qantas will build a new International Business Lounge at Melbourne Airport up to one-third larger than its existing footprint, with completion expected by 2029.
The carrier also plans to base some of its Airbus A350-1000LR fleet at Melbourne, drawn from an order of 12 of the ultra-long-range aircraft, unlocking new non-stop international destinations from the city.
Qantas and its low-cost subsidiary Jetstar currently fly to 17 international destinations from Melbourne.
Jetstar operates up to almost 1,000 flights per week in peak periods from the airport, accounting for around 45 per cent of its overall domestic passengers.
“This will unlock growth for both Qantas and Melbourne Airport and improve the travel experience for millions of our customers every year," says Qantas Group CFO Rob Marcolina.
“From check-in to our lounge experience to our new fleet, we’re investing right across our business to reshape the way our customers travel to and from Melbourne."
Marcolina says the A350-1000LRs will open up new route possibilities from Melbourne that were not previously viable, while the expanded lounge and improved check-in infrastructure will deliver a better experience for passengers.
Melbourne Airport CEO Lorie Argus describes the agreement as a vote of confidence in Melbourne.
“We’re proud to be Australia’s largest 24-hour gateway and pleased to be partnering with Qantas to deliver the most significant upgrade to Melbourne Airport in its history," says Argus.
"Our partnership will bring together Melbourne Airport's investment in critical infrastructure with the Qantas Group’s investment in aircraft, customer experience and network growth, creating new opportunities for travellers and Victoria's economy.
“The new Qantas International Business Lounge will deliver significant improvements for their premium customers and will boast one of the best views at the airport.
“We look forward to working with both Qantas and Jetstar to grow and enhance their customer offerings over the coming years.”
Construction on Melbourne Airport's third runway is already progressing ahead of the 2031 opening, with the infrastructure expected to ease capacity constraints and support long-term growth in both domestic and international traffic.
The 3km-long runway, approval for which was granted by the federal government in 2024, is being built parallel and 1.3km to the west of the existing north-south runway, along with new taxiways and other enabling infrastructure.
The parallel runway system is expected to significantly increase Melbourne Airport’s capacity by allowing for simultaneous take-offs and landings, which will help reduce delays and give existing airlines and new entrants infrastructure to expand their capacity into the city.
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