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Sydney Airport buys back Qantas terminal

Sydney Airport will take control of retail operations, office space and lounges at Terminal 3 next month after agreeing to pay some $535 million to buy the terminal's lease from Qantas.

Sydney Airport will take control of retail operations, office space and lounges at Terminal 3 next month after agreeing to pay some $535 million to buy the terminal’s lease from Qantas.

Under the new agreement, Qantas will revert ownership of the terminal back to Sydney Airport as of 1 September this year. It will bring Qantas’ 30-year lease on the terminal to an end, four years ahead of the 30 June 2019 expiry date.

In exchange for ending its contract early, Qantas will receive total cash proceeds of $535 million from Sydney Airport and will retain priority usage of the terminal through to 30 June 2025. This includes priority usage of the majority of terminal’s gates, check-in and baggage facilities.

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While Qantas will still have a major presence at the terminal, the agreement allows Sydney Airport to going ahead with plans to unite its domestic and international operations over the long term.

In the meantime, the new arrangement won’t heavily impact travellers flying Qantas, except that it will incur a per-passenger charge at an agreed rate through to 2025. The charge will be applied from 1 September.

Qantas Group Chief Executive, Alan Joyce, said the deal secures the airline’s long-term position in its ‘largest hub’.

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“We now have certainty about our future operations in Terminal 3 post-2019, and an outcome that is a win-win for both Qantas and Sydney Airport.”

Alan Joyce, Qantas CEO

Sydney Airport’s MD, Kerrie Mather, added that the agreement will deliver a positive outcome for both parties.

Terminal 3 is around 74,000-square-metres and includes 17 gates as well as 24,000-square-metres of office and leasable space.

There’s also 51 commercial outlets, three lounges and 120 valet car parking spaces.

What are your thoughts on the agreement?