QANTAS: The bids are in – NSW, Queensland & Victoria lodge bids for headquarters
As big business does, Qantas is auctioning off the right for three states to host its headquarters. Lucas Baird over at the AFR is reporting that a Qantas spokesman said a decision is due before the end of March. You may remember that Qantas launched this review in an attempt to save AU$40 million in accommodation costs back in September of 2020.
The majority of the airlines offices are currently located in the Sydney suburb of Mascot. I doubt that Qantas CEO wants to relocate to rainy, smoggy Melbourne, or the home of competitor Virgin Australia in Brisbane. It would not be a good look in a time where JobKeeper is ending for Qantas to be telling shareholders of the millions in staff relocation costs it has brought on itself.
The ‘new’ headquarters will need to house 5000 staff currently located in Sydney, 1,000 formally from Melbourne and around 750 associated roles currently in Brisbane. I suspect under the new normal of working from home, current Sydney office space is capable of that. Maybe that’s just state bias on my part.
Of course, we don’t, and will probably never know the amount of cash in these ‘bids’, or as I prefer to call them – subsidies.
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The northern state is already the home of the 787 Dreamliner base in Brisbane (since 2017), and the Qantas Group Pilot Academy (Toowoomba).
The Queensland government through its sovereign wealth fund already has a stake in the re-born Virgin Australia, based in Brisbane.
Co-locating the two airlines in the same city would arguably assist with recruitment and training.
New South Wales
Bidding for the headquarters to remain in Sydney is nonsensical really. Its basically holding the state government to ransom – ‘if you don’t give us money we are leaving you!’ But then what won’t a CEO willing to ground an entire airline not sink to? The current Qantas cost-saving plan schedules about a1,000 workers to be moved from other states to Sydney the headquarters.
The southern state is the home to Jetstar and 1,500 of its employees. Premier Daniel Andrews needs to do his best after the COVID-19 lock-down to prove that he is an employment-centric leader, who will stop at nothing to lure business to his state. He also has a bit of local government support.
This is just another case of socialising the costs of big businesses by holding an auction for government underwriting, which we the taxpayers will then pay for. As the then federal Trade and Tourism minister Simon Birmingham said – this tactic of calling for bids for the Qantas head office is “corporate welfare-seeking”. And he is a member of a conservative ‘liberal’ government!
On the other hand, as a Qantas shareholder, why should I worry?
My bet is that Qantas executives, who aren’t half-clever, will be doing a merry dance juggling the offers and conditions so that they get the maximum investment out of one or more of the state government treasuries with the smallest amount of cost to Qantas. That’s a cost-cutting post-COVID-19 recovery plan!
Alan Joyce, who’s a clever boy, then?