Qantas is conducting a group wide review of its rented space, particularly corporate offices.
The airline is headquartered at a 49,000 square metre facility at Sydney’s Mascot while its Jetstar arm is based in Melbourne’s Collingwood.
Property occupied for flight simulator centres – the group again isolating the south eastern capitals – as well as aviation facilities including heavy maintenance factories in Brisbane will also be moved “particularly if there was an opportunity to bring some or all of these…together within Australia”.
The strategy forms part of a reset-and-recovery post COVID-19 plan.
Qantas expects to make a decision about a consolidation within three months.
In May, travel agency Flight Centre sold its St Kilda Road headquarters to Shakespeare Group for $62.15 million – also in response to the pandemic, which has near halted flying.
Prepared to consolidate to one city: Qantas
“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,” a company statement said.
“The review will focus chiefly on non-aviation facilities including the national carrier’s…head office in Mascot and Jetstar’s leased head office in Collingwood.
“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”.
Qantas chief financial officer Vanessa Hudson added “like most airlines, the ongoing impact of COVID means we’ll be a much smaller company for a while” and “we’re looking right across the organisation for efficiencies, including our $40m 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,” the executive said.
“For instance we could co-locate the Qantas and Jetstar head offices in a single place rather than splitting them across Sydney and Melbourne”.
Western Sydney is on our radar: Qantas
“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,” according to Ms Hudson.
“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,” the executive added. “And we’re open minded about the outcome” (story continues below).
Qantas could be swayed by existing landlords
Ms Hudson said it is possible Qantas’ and Jetstar’s respective headquarters could stay where they are but become “a lot smaller”.
“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”.
State governments will need to back
Qantas intends to remain one of the country’s largest employers and a major generator of economic activity, according to Ms Hudson, “so we’re keen to engage with state governments on any potential incentives as part of our decision making”.
“To assist with the first phase of consolidation, Colliers International has been appointed to sublease about 25,000 sqm of surplus space across Mascot, Melbourne CBD and Hobart.
“A lease on a 230 sqm Sydney CBD office that is due to expire in October will not be renewed”.
History of company headquarters (source: Qantas)
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