HQs stay grounded for Qantas with expansions in the wings for Melbourne, Brisbane

HQs stay grounded for Qantas with expansions in the wings for Melbourne, Brisbane

Qantas Airways (ASX: QAN) CEO Alan Joyce says moving headquarters was "always a live option" since a property review began in September, but the airline has opted to keep its global HQ in Sydney with an upgraded frequent flyer lounge, while Jetstar will continue to be run from Melbourne.

Following initial announcements in February around new flight training centres in Sydney and Brisbane along with the expansion of existing Melbourne facilities, Qantas has today revealed several shake-ups including a boost for heavy maintenance works on aircraft.

Longer term, the airline has also indicated Sydney will be the launch city for the first Project Sunrise flights non-stop to cities including New York and London once international travel recovers and the investment goes ahead.

Qantas is also committing $50 million over the next decade for developing sustainable aviation fuels capacity.

Some of the more immediate effects of the review however relate to engineering capacity, including a new Jetstar engineering heavy maintenance facility at Melbourne Airport through a new partnership with Melbourne Airport, the Little Group's Melbourne Jet Base (MJB) and the Victorian Government.

Qantas will establish its principal engineering line maintenance hub in the Victorian capital, where Jetstar's head office remains in Collingwood although there is still potential for a move elsewhere in Melbourne.

The Victorian Government expects the new engineering hubs will create at least 300 direct jobs and an estimated 400 indirect jobs, as well as increased training and apprenticeship opportunities, providing an estimated $140 million boost to gross state product.

"This is  a major coup and a tremendous boost for jobs - directly under the Qantas and Jetstar banners, and right across the Victorian supply chain," says Victoria's Minister for Industry Support and Recovery, Martin Pakula.

"Victoria recognises the value that these highly skilled jobs bring to the state and we look forward to delivering on what we know Qantas and Jetstar are capable of post-COVID," says Joyce.

Meanwhile, Qantas has announced plans to relocate some heavy maintenance for Jetstar's Airbus A320 fleet from Singapore to Brisbane as part of a trial this year, while discussions are underway with the state government to conduct additional aircraft maintenance work in Cairns with an existing local supplier.

Also in Queensland, discussions will now commence with the government about basing several Embraer E190 jets in Townsville in partnership with Alliance Airlines.

Other commitments include an expansion of Qantas Loyalty in Mascot, Sydney, and a pledge to work with the NSW Government to develop a comprehensive Indigenous and diversity employment program.

In return for its commitments, Qantas is expecting a range of benefits including payroll tax relief, tourism marketing funding, property rebates, training support and direct incentives, all of which are designed to reflect and help increase future economic activity generated by the Group.

"Ultimately, our recovery program is about putting us in a position to grow again, which is when the benefits to each state will really flow," says Joyce.

"Each state put a lot of effort into their offers. We thank them sincerely and we look forward to delivering on what we know Qantas and Jetstar are capable of post-COVID.

"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."

Joyce believes aviation has probably taken the biggest hit of any industry from the COVID-19 crisis, with his airline seeing $11 billion worth of revenue "evaporate" because of state and federal travel restrictions.

"Under those circumstances, we had to look seriously at every part of our business and that's why reviewing our property footprint became part of our recovery program," he says.

"Some of this has been about cost saving by rationalising office space and some is about unlocking the huge amount of future value that the Qantas Group will bring the local economy in the years ahead. We think that value deserves to be recognised.

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