Qantas (QF, Sydney Kingsford Smith) has said in a statement that it will sell its domestic terminal at Melbourne Tullamarine Airport for AUD355 million Australian dollars (USD246 million), to consist of AUD276 million in cash on settlement and the remainder “to be accrued in future periods”.

All of its retail and aeronautical assets at the terminal, known as Terminal 1 (T1), will be transferred to the airport as per the agreement, which is valid from July 1.

However, Qantas has also signed a 10-year operational licence deal that gives it exclusive access to T1 for domestic services, including its premium passenger lounges.

The airline said it would assess options to operate some international flights from the terminal "outside of peak times", with the airport agreeing in a separate statement that such a move would optimise capacity at all times of the day.

"The T1 agreement recognises the important relationship between Qantas and Melbourne Airport. It secures T1 as Qantas’ Melbourne home over the next decade, by which time Melbourne will be well on the way to being Australia’s largest city by population," the airport said.

It is Qantas’s third such sale in recent years. In 2014, Brisbane Int'l paid the airline AUD112 million to buy its lease for part of the domestic terminal, which had been due to expire at year-end 2018. In 2015, Sydney Kingsford Smith paid Qantas AUD535 million to buy back a lease for Terminal 3 four years before expiration, allowing the carrier priority usage of the terminal until June 2025.

Melbourne is Qantas's second-most important airport by capacity, accounting for 17.14% of its weekly seats (132,380 of the total 772,416) and 14.48% by weekly flights (778 of 5,372). Five of Qantas's routes from Melbourne are among its top seven routes by capacity, namely to Sydney, Brisbane, Perth Int'l, Adelaide, and Canberra.