Qantas considers moving Sydney head office to save costs

Qantas is considering relocating its 49,000m2 head office in a Sydney suburb as part of a three-month cost-saving review of the location of some of its key facilities.

Qantas is considering relocating its 49,000m2 head office in a Sydney suburb as part of a three-month cost-saving review of the location of some of its key facilities.

The Australian flag carrier, which spends A$40 million ($29.3 million) a year on renting office space, is also looking at options for Jetstar’s leased head office in the Collingwood suburb of Melbourne, to which it relocated from Sydney in 2004.

“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,” the airline says in a 15 September statement.

While the review will focus on “non-aviation facilities”, some aviation facilities will be considered for possible relocation, it adds. These include flight simulator centres in Sydney and Melbourne, as well as Qantas’ heavy maintenance facilities in Brisbane – “particularly if there was an opportunity to bring some or all of these facilities together elsewhere in Australia”.

Qantas says any relocations are likely to be staggered over time, “potentially years”, depending on what options it takes up.

The review “flows” from already announced job losses, the “need for more efficiencies and setting the group up for the future”, Qantas says. It has no intention of moving any facilities overseas.

“As well as simply rightsizing the amount of space we have, there are opportunities to consolidate some facilities and unlock economies of scale. For instance, we could co-locate the Qantas and Jetstar head offices in a single place rather than splitting them across Sydney and Melbourne,” says chief financial officer Vanessa Hudson.

“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. We’ll also be making the new Western Sydney Airport part of our thinking, given the opportunity this greenfield project represents.”

Hudson adds that the review is about setting up the group for the “long term as well as recovering from the Covid crisis”.

“And we’re open-minded about the outcome. It’s possible that our HQ stays where it is but becomes a lot smaller, and other facilities consolidate elsewhere. 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,” she says.

Canadian real estate company Colliers International has been appointed to sublease about 25,000m2 of surplus office space across Mascot (Sydney), Melbourne’s central business district and Hobart, state capital of Tasmania. A lease on a 230m2 Sydney central business district office that is due to expire in October will not be renewed, Qantas adds.

Separately, compatriot Virgin Australia announced a change of registered office address within Brisbane, in a 14 September filing to the Australian Securities Exchange.