Qantas (QF, Sydney Kingsford Smith) was offered AUD50 million Australian dollars (USD38.7 million) over four years by the New South Wales (NSW) government in exchange for running its new ultra-long-haul Project Sunrise flights exclusively out of Sydney for at least five years, and for keeping its headquarters in the state for at least 30 years.

This has been revealed in a confidential letter by NSW Treasurer Dominic Perrottet to Qantas Chief Executive Officer Alan Joyce penned on April 27, 2021. The letter has come to light after it was included in a number of documents tabled at the NSW parliament, reports the Sydney Morning Herald.

As previously reported, Qantas – following an AUD2.7 billion (USD2 billion) loss for FY20 due to the effects of COVID-19 - announced last September it was considering moving its offices and aviation facilities within Australia and invited expressions of interest from different states.

Under review were its global head-office in Mascot, Sydney and subsidiary Jetstar Airways’ head-office in Collingwood, Melbourne. Aviation facilities that could be relocated included flight simulator centres in Sydney and Melbourne, as well as Qantas’ heavy MRO base at Brisbane Int'l.

The lure of the company’s 3,500-strong workforce sparked a bidding war with Queensland and Victoria.

However, on May 6 Qantas and Jetstar announced they had decided to retain their head offices in Sydney and Melbourne respectively, and that Qantas’ heavy maintenance facility would also remain in Brisbane and would be enhanced.

Qantas also confirmed that Sydney would be the launch city for the first Project Sunrise flights (non-stop to cities including New York and London) once international travel recovered and this investment went ahead.

It further announced the construction of a new flight training centre with aircraft simulators to be based in NSW from 2023; and plans for expansion of Qantas Loyalty in Mascot, Sydney. Qantas would also work with the NSW government to develop a comprehensive indigenous and gender diversity employment programme.

From the letter, it now emerges, these were all conditions attached to the NSW financial incentive. According to this, the NSW demanded:

  • The retention of the Qantas head office in NSW for at least 30 years, with no net job losses in the first five years;
  • The creation of at least 2,000 over the first five years;
  • Relocation and centralisation of the Qantas loyalty programme activities from Melbourne to Sydney;
  • Commitment to proceed with Project Sunrise with this being based exclusively in Sydney for at least five years from commencement;
  • Establishment of a simulator centre in NSW;
  • Establishment of a NSW centre for service excellence for pilots and crews;
  • A commitment to meet indigenous and gender diversity employment targets to be agreed annually.

A Qantas spokesperson told the Herald it had received the “draft offer” from the NSW government about a week before it had finalised its decision to remain in Sydney. “It does not reflect the final agreement which, as we said in our announcement of May 6, is still being negotiated,” the spokesperson said.

“We won’t be commenting on any detail of the agreements with any of the states because they are commercial-in-confidence. In principle, though, these agreements are about states recognising the significant value that the Qantas Group will bring to each local economy in the years ahead,” he added.

A spokesperson for Perrottet said: “A final binding deal with Qantas is yet to be agreed, and we continue to work on the details after reaching an in-principle agreement in May".

In February, Qantas announced its revenue in the six months to the end of December had fallen by nearly AUD7 billion (USD5.4 billion), leading to a statutory loss before tax of AUD1.47 billion (USD1 billion).