Qantas has announced the sale of its domestic terminal, also known as Terminal 1, at Melbourne Airport for $355 million.
Under the terms of the deal, Melbourne Airport will pay Qantas $276 million in cash upon settlement, with a further $79 million “to be accrued in future periods”, Qantas said in a statement on Thursday.
Further, Qantas has also signed a 10-year agreement that includes exclusive access to Terminal 1, including its premium passenger lounges, for domestic services. Melbourne Airport gets the aeronautical and retail assets and will manage the property. The agreement starts on July 1 2019.
“Options to operate some international flights from Terminal 1 outside of peak domestic times will be assessed,” the Qantas statement said.
Melbourne Airport said in a statement the use of the Terminal 1 for international operations would optimise the use of available available capacity that existed at some times of the day across the airport precinct.
Meanwhile, the transition to the new Terminal 1 operational licence would be phased in over a period of time to minimise disruption to passengers.
“This is a very important step for us,” Melbourne Airport chief executive Lyell Strambi said in a statement issued by the airport.
“It will support the ongoing commercial success of our largest customer here in Melbourne, while creating more capacity and greater choice for passengers.”
Melbourne Airport said it would establish a new retail offering at Terminal 1.
Qantas group chief executive Alan Joyce said: “It’s great that Melbourne Airport was prepared to take a commercially rational approach to make this deal possible.”
“Unfortunately, the current system doesn’t have an independent arbitrator for airports that aren’t commercially rational, which creates a stalemate around these critical pieces of infrastructure. That’s why we’re continuing to argue for regulatory change.”
Qantas’s sale of Terminal 1 at Tullamarine is the airline group’s third such deal in recent years.
In August 2015, Sydney Airport paid Qantas $535 million to buy back the airline’s lease over Terminal 3 at Mascot four years before the 30-year lease was due to expire.
The deal included Qantas retaining priority usage to Terminal 3 through to 30 June 2025.
And in February 2014, Brisbane Airport paid Qantas $112 million to purchase the lease over the northern end of the domestic terminal. The 31-year lease was due to expire at the end of calendar 2018.
The transaction also covered Qantas’s “use of the runway system at Brisbane Airport, including current infrastructure and the new parallel runway” under construction, the airline group said at the time.
Qantas still held the lease on the maintenance facilities at its Mascot jetbase.
