Qantas and Jetstar headquarters to stay put, but flying kangaroo’s JAL alliance in doubt
Qantas Group has completed a location review of its key facilities across the country, which will see the national carrier continue to have a presence in NSW, Victoria and Queensland.
The group commenced the review of its property footprint in September 2020 after suffering a $2.7 billion statutory loss for FY20 due to international and state travel restrictions.
The review forms part of Qantas Group’s COVID-19 recovery plan in an effort to cut overheads and involved a competitive process between states.
Some initial actions of the review were announced in February, including the relocation of flight simulator training facilities and the consolidation of several rented office spaces.
Qantas’ global headquarters, which employs more than 3,500 people, will remain at Mascot in Sydney, along with its existing customer service training facilities. There are also plans to expand Qantas Loyalty in Mascot.
The airline has confirmed the construction of a new flight training centre with aircraft simulators to be based in NSW from 2023.
Qantas will also work with the NSW government to develop an Indigenous and diversity employment program.
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 this investment goes ahead.
Jetstar’s headquarters, which employs more than 750 people, will remain in Collingwood for now.
However, the low-cost carrier is in discussions with the Victorian government about where specifically in Melbourne the head office is best based in the longer term to support expected growth.
Qantas Group will expand its line maintenance engineering and Jetstar will expand its heavy maintenance in Melbourne through a new partnership with Melbourne Airport, the Little Group’s Melbourne Jet Base and the Victorian government.
The company said this partnership will create additional direct and indirect jobs as its network grows.
As previously announced, the existing flight training centre in Melbourne will be expanded, with work already well underway.
Qantas’ heavy maintenance facilities will remain in Brisbane and be enhanced through investment, while Jetstar is relocating some heavy maintenance on its Airbus A320 fleet from Singapore to Brisbane as part of a trial in 2021, with the potential for this to be extended.
Discussions are underway with the Queensland government about conducting additional maintenance on Qantas aircraft in Cairns with an existing local supplier.
As previously announced, a new flight training centre is being built at Brisbane Airport, with the first pilots due to commence training there from November 2021.
Qantas will now commence with the Queensland government about basing several Embraer E190 jets in Townsville in partnership with Alliance Airlines.
Discussions during the review included the potential for accelerating the development of the company’s sustainable aviation fuel capacity, which would require it to invest in a new or existing refinery and available feedstock.
Qantas has committed $50 million over the next decade towards creating this new industry in Australia as part of its broader sustainability strategy, and will continue to work with state and federal governments towards this goal.
Once agreements are finalised, Qantas will receive a range of benefits for these commitments, including payroll tax relief, tourism marketing funding, property rebates, training support and direct incentives.
The total value of these incentives will roll out over multiple years, but will remain commercial in confidence.
The assessment process also involved an independent review conducted for Qantas by PwC to validate the offers.
Qantas Group CEO Alan Joyce said: “Aviation has probably taken the biggest hit of any industry from the COVID crisis, and Qantas has seen $11 billion in 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.
“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.
“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.
Joyce said 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,” he said.
“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.”
The Transport Workers’ Union (TWU) is demanding that the NSW government discloses the full amount of public subsidies which have been promised to Qantas to keep its headquarters in Sydney.
TWU national secretary Michael Kaine said taxpayers had a right to know exactly what the deal involves.
“Qantas has been playing an expensive game of chicken, and the Treasury blinked,” he said.
“Qantas gamed the Treasurer into handing them a no-strings-attached, taxpayer-funded handout.
“Qantas has axed the jobs of thousands of workers and given contracts to companies known for low standards and for ripping off their workers. This ultimately hurts our economy and taxpayers will cop it.
“The government should have used their leverage to make Qantas promise to restore the jobs and job security they took away.
“The government should release every detail about this special deal immediately. If taxpayers are paying for it, taxpayers have a right to see it.
“Qantas has been given $2 billion by the federal government and appears to be getting some state governments to write blank cheques for it too. We demand full disclosure on what this involves.”
ACCC to deny Qantas-Japan Airlines alliance
Meanwhile, the Australian Competition & Consumer Commission (ACCC) is proposing to deny authorisation for Qantas and Japan Airlines (JAL) to coordinate flights between Australia and Japan for three years under a proposed five-year joint business agreement.
ACCC chair Rod Sims said an agreement for coordination between two key competitors breaches competition laws, and that the competition watchdog can only authorise these agreements if the public benefits from the coordination outweigh the harm to competition.
“At this stage, we do not consider that Qantas and Japan Airlines’ proposal passes that test,” he said.
Before the COVID-19 pandemic, Qantas and JAL were the only two airlines offering direct flights between Melbourne and Tokyo.
They were also two of only three airlines (the other being All Nippon Airways) offering direct flights between Sydney and Tokyo.
Sims noted that protecting competition in the commercial aviation sector is critical to ensuring recovery the tourism sector’s recovery from the impacts of COVID-19, once international travel restrictions ease.
“This proposed coordination would appear to undermine competition significantly by reducing the prospect of a strong return to competition on the Melbourne-Tokyo and Sydney-Tokyo routes when international travel resumes,” he said.
“Granting this authorisation would seem to eliminate any prospect of Qantas and Japan Airlines competing for passengers travelling between Australia and Japan, as they did before the COVID-19 pandemic.
“This elimination of competition would benefit the airlines at the expense of consumers.”
Sims said the ACCC considers that Qantas and JAL combining their operations would also make it more difficult for another airline to seek to launch flights on these routes.
“We took into account that there may be some short-term benefits from the proposed agreement, such as allowing Qantas and Japan Airlines to more quickly reinstate flights between Australia and Japan,” he said.
“Our current view is that these are outweighed by the severe harm to competition.
“We have been willing to be flexible in granting limited exemptions from competition law during this time of severe economic impact on the travel sector due to COVID-19.
“However, we must ensure that this doesn’t open the door to anticompetitive agreements that significantly harm competition in the medium to long term.”
The ACCC is seeking submissions from interested parties in response to its draft determination on the proposed alliance between Qantas and JAL by Thursday 27 May 2021 before making a final decision in June.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
accc airline airlines alan joyce Australian Competition Consumer Commission aviation brisbane Collingwood head office headquarters jal japan airlines jetstar mascot melbourne Michael Kaine nsw NSW Government property review qantas qantas group queensland rod sims sydney Transport Workers Union twu victoriaLatest News
Holland America Line gives agents the chance to visit Alaska on 11-day Famil
If you've ever wanted to see a Polar Bear (and who doesn't?), now is your time.
More than 65 luxury agents gather in Sydney for Best of the Best dinner
This looks like a fabulous do. We imagine there may be a few (or maybe 65) sore heads this morning!
Globally-renowned chefs gather for Vivid Food 2024
As a human, we agree that food is a fundamental part of the human experience. Some might say the most fundamental.
Air New Zealand returns to Hobart and Seoul
If you notice an uptick in Kiwis making their way through the Mona, you know why.
European Waterways targets multi-generational families with ‘floating villa’ deal
The jury is still out on whether spending a week on a 'floating villa' with family is a hell or a paradise.
Luxury Escapes launches ‘sail away’ sale
Rest assured, you'll be getting your 'sails' and 'sales' mixed up for the rest of the day.
Rex-owned National Jet Express adds weekly charter between Brisbane and Orange
This is for mining and civil contractors, so please, put your holiday attire away.
Let the games begin. Viking introduces eye-watering benefits for the industry’s top 10 advisors
Did someone say 'trip to Venice'? Hold my coat, this one is far too good to miss!
Best friends or frenemies? What is the REAL relationship between sales and marketing?
We can all stop fighting over the corner office because our mothers were right - we are all important in our own way.
The Walshe Group Announces Two Key Appointments
What we really want to know is whether they got joint or separate welcome parties.
FAMIL: Agents explore the delights of Mauritius on 7-day tour
Go green with envy as you read this fabulous itinerary! Time to book that second honeymoon.
Hamad International recognised as world’s best airport at 2024 Skytrax World Airport Awards
Hamad airport is so good it is almost considered a destination in itself. Ballina, up your game.
Saudi Arabia highlights tourism investment opportunities at global investment event
Now is the time to start looking at Saudi Arabia if you are not already. There's big things to come.
“Rampant” – Aussies warned as dengue fever cases spike in Bali
Worried about Bali belly? Now you have something else to worry about.
TTC Tour Brand reveals slew of deals across operators including Trafalgar and Contiki
Everybody loves a bargain and you could do lot a lot worse than check out these deals from TTC!
Fiji Airways partners with Porter Airlines in US growth bid
Any initiative that gets more people visiting the delights of Fiji is a good initiative.
Flight Centre launches CruiseHQ – a marketplace exclusively for agents
The cruise industry has surpassed pre-Covid levels so this isn't one to miss!
Feeling festive? Wendy Wu tours unwraps Christmas collection
Get the Christmas hols booked now and avoid spending it with that elderly relative with dubious political views.
OPINION: In a world of screens, we crave experience
If you get feelings of deep shame and regret when you see your screen time, don't worry - you're not alone.
Sun Princess: High-end dining and world class entertainment awaits
If you are a foodie and you are not currently on the Sun Princess, we really have to ask - what are you doing?
YouGov: 2 in 5 Aussies would pay more for a sustainable hotel
If you want to be REALLY sustainable you can go camping. You just might lose the will to live.
“Can planes swim?” – Planes become boats as Dubai Airport is savaged by severe storm
Unfortunately, "can planes swim?" is a real life question and not an opener to a really bad joke...
Explora journeys reveals bespoke outdoor furniture designed by Matteo Nunziati
This is making your plastic table and chairs look really bad now, isn't it?
Bangkok Airways targets growth with renewed Sabre deal
Two stories abut Sabre's growth in one week and its only Wednesday! Watchout world.
PR agency Example wins pitch for InterContinental Sydney
We also went in for the contract but they said that a 'Be Our Guest'- themed TikTok was unoriginal! The cheek.
Norwegian Cruise Line reveals culinary experience aboard Norwegian Aqua
Once again, this TW journalist REALLY regrets writing this before getting lunch.
Signature Queensland hosts luxury tourism event
Known for its tropical beaches and unique wildlife, Queensland also offers luxury.
Capella Sydney recognised in prestigious Travel + Leisure’s 2024 ‘it list’ of best new hotels
You know that 'it girl' at school who everyone wanted to hang out with? Capella is the hotel version of that.
Rex launches 72-hour fare sale with NO school holiday blackout so you can take your kids (if you want to)
Sadly, leaving your children at home whilst you go on holiday is generally frowned upon.
Adventure World offers chance to connect with “heart and soul” of the US
I mean who hasn't dreamed of a road trip around the US?! Go with Adventure World and you're less likely to get lost.
Fiji’s family-owned luxury resort Likuliku Lagoon launches its own app
We were relieved to find out that having a "concierge in your pocket" referred to an app on your phone.
Hawaii: The US’ laid-back front door for Australians
If you needed another sign that you should definitely head to Hawaii - this is it!
Sabre targets Asia Pacific growth with latest hire
Call the Avengers! Sabre continues its bid for world domination with latest hire.
Air New Zealand signs its largest EVER deal for sustainable aviation fuel
Air New Zealand makes huge step towards sustainable travel. We bet it recycles its rubbish properly too.
IHG Hotels & Resorts continues regional growth with Sunshine Coast Holiday Inn
This Holiday Inn looks considerably flashier than some of the ones we have stayed at in our time.
Budget carrier Scoot welcomes first of 9 E190-E2 aircrafts
Here at TW we would like to offer Embraer E190-E2 a warm welcome! It's not easy being the first of the fleet.