Qantas sells Sydney Airport terminal lease for $535 million
By David Flynn, August 18 2015
Sydney Airport will regain day-to-day ownership of the dedicated Qantas domestic terminal next month, paying Qantas $535 million to buy out the airline's lease some five years ahead of schedule.
Terminal 3 has been the exclusive domain of Qantas for almost 30 years, with all other domestic airlines relegated to the neighbouring Terminal 2, although the lease was due to expire in June 2019.
"This deal provides certainty," Qantas CEO Alan Joyce said of the agreement. "The lease was always going to revert after 2019."
Qantas will retain use "priority usage as the primary airline customer of Sydney's Terminal 3" from 2019 to mid-2025, Joyce stressed, including access to most check-in and baggage facilities and departure gates, but from September would pay Sydney Airport Corporation a per-passenger fee, as does competitor Virgin Australia for the partial use of T2.
In the short term Sydney Airport will take over the running of T3 retail stores.
The longer game, however, remains a co-siting of domestic and international flights at the terminal, allowing more seamless connections for Qantas passengers transferring between Australian and overseas flights.
Sydney Airport CEO Kerrie Mather said that would not happen over the next five years but could be achieved before 2025.
"The integration of terminals is a key plank in our long-term master plan," Mather re-iterated. "Acquiring Terminal 3 allows us to be able to achieve that."
Qantas has already handed its Brisbane terminal lease back to Brisbane Airport in exchange for a $112 million fee and is looking to similar arrangements with Melbourne and Perth airports to further boost the airline's bottom line.
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David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
20 May 2015
Total posts 581
So QF is getting more cash. Good.
As much as I know everyone else will say the same thing... I think that liquidity should be reinvested in a good cause. You know, like fleet renewal.
Qantas - Qantas Frequent Flyer
10 Apr 2013
Total posts 390
Melbourne and Perth will be next. Help Qantas to pay down more debt and reinvest.
31 Jul 2012
Total posts 20
This used to be a major feather in QF's cap - they could control the passenger experience end to end. Now wait to see SACL turn it into T2.
The cynic in me says this is Joyce shoring up his departure bonus with no thought for the long term.
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