"Qantas may sell airport terminals"

Monday, August 25, 2003
 
Qantas may sell airport terminals
The Australian Associated Press


Qantas Airways Ltd is considering whether to sell-off its domestic passenger
terminals in Sydney and Melbourne, in a move which could reap up to $500
million.

A Qantas spokeswoman said talks had begun with airports and other parties
over the terminal sales, as the airline embarks on a $6 billion investment
program over the next three years.

A decision on the sale of the terminals would hopefully be made within the
next six months, the spokeswoman said.

Qantas chief executive Geoff Dixon recently told Business Review Weekly that
considering his airline was one of the few in the world to own its
terminals, it could sell and lease back some of its assets.

Mr Dixon also said it was possible the terminal assets could be spun-off
into a separate property trust, and that he suspected it was "more
efficient" not to own them.

"We make money out of the terminals but it is money tied up," he told BRW.

"We don't feel the need to sell them at the moment ... (but) Peter [Gregg,
the chief financial officer] is looking at those possibilities as part of
our program." 

The review of its $2 billion property portfolio follows the decision by
several major companies to sell-off property assets to improve their gearing
ratios and concentrate on core operations.

Major retailers Woolworths Ltd and David Jones Ltd are just two examples to
have done this in recent times, while Wesfarmers shifted the Bunnings
Warehouse outlets into the separately listed Bunnings Warehouse Property
Trust in 1998.

Qantas has also recently announced a $1 billion cost cutting program over
the next two years, and is splitting its operations into eight stand-alone
business units, each with their own budgets and management.

It will also decide by November whether to launch a low cost carrier after
last week announcing a 19.7 per cent fall in annual net profit to $343.5
million.


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