Qantas remains in discussions to sell its lease on domestic terminals at Sydney and Melbourne airports in a move which could raise as much as $650 million.
The airline has already agreed to hand its long-term Brisbane Airport terminal lease back to Brisbane Airport Corporation for $112 million.
Qantas Group CEO Alan Joyce said the agreement was "in line with our strategy of unlocking value in non-core assets."
Qantas currently holds long-term leases on its Sydney and Melbourne terminals, which expire between 2018 and 2019, but seeks to relinquish and sell each lease back to the parent airport and then rent the facility back at a lower price.
The Melbourne terminal is expected to fetch around $150 million, according to analysts while the airline’s flagship Sydney T3 terminal is valued at $400-$500 million because it also includes the adjacent Qantas Jet Base hangar and maintenance facility.
However Qantas will then face the cost of building an all-new engineering hangar, as Sydney Airport plans to use the Jet Base footprint to expand its passenger terminals for combined domestic and international flights.
Sydney Airport’s 2033 Master Plan has earmarked land in the airport’s south-east precinct, near the third runway and General Holmes Drive, for Qantas and Virgin Australia hangars.
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About David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.