Australian carrier Qantas to sell land for US$595 million to ease pandemic debt
Australian flag carrier Qantas announced on October 15, 2021 that it had entered into a binding agreement with real estate management services provider LOGOS Property Group for the sale of 13.8 hectares of land for A$802 million ($595 million).
Qantas weighed up options for the land, located in Sydney’s inner-south suburb of Mascot, where Sydney Kingsford Smith International Airport (SYD) is, when the airline group evaluated its national property footprint in early 2021. The review made clear to Qantas Group that there is no long-term need for the company to develop the land, which is largely surplus to its operations.
The majority of the property settlement is expected to be done in the first half of this financial year 2021, with the funds to be used to reduce the airline’s debt and accelerate its recovery from the pandemic.
“We’ll use these funds to help pay down debt that we’ve built up during the pandemic. The strength of this sale and its impact on our balance sheet means we can get back to investing in core parts of our business sooner,” commented Qantas CEO Alan Joyce in the airline’s official statement.
“The extended lockdowns and border closures of the past few months have been extremely tough, but this transaction adds to the growing momentum around our recovery.”
Qantas also said that it entered into discussions with LOGOS about potential future development options for the property they are acquiring, including the creation of a dedicated precinct for Qantas, as well as the sale of an additional 3 hectares of adjacent land.
The airline expects to finish evaluating the proposals by early 2022, and if an agreement is reached, it has the potential to raise the total value of the deal to more than A$1 billion ($741 million).
“Beyond the deal we’re announcing today, there’s potential for us to work with LOGOS on creating a Qantas Precinct as part of their redevelopment plans for the site. It could see a new headquarters combined with a relocated training centre and distribution hub, right next to the airport, rather than being spread across different parts of Mascot as they are now,” added Joyce.
“The restart date for international travel has been brought forward and the thresholds for domestic borders opening in most states should be reached in the next two months. We know there is a lot of pent-up demand that we’re ready to capitalise on, with some strong signs already.”
Qantas announced on October 1, 2021, that it will resume its international flights on November 14, 2021, a month earlier than originally expected.
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