Sale of Qantas Defence Services

Sydney | Published on 29th August 2013 at 8:52

Qantas has today announced the sale of its wholly owned subsidiary Qantas Defence Services (QDS) to Northrop Grumman Australia, a subsidiary of Northrop Grumman Corporation, for a price of $80 million for the business and other related assets.

QDS provides maintenance and engineering services on aircraft and engines to government and military customers and engineering consultancy services to the naval industry across key operations in Sydney, Brisbane and Canberra.

QDS will be renamed to reflect the revised ownership structure of the business.

Qantas Group Chief Executive Officer Alan Joyce said he was pleased with the agreement that had been reached with Northrop Grumman.

“Since 1999 Qantas Defence Services has grown to provide extensive aircraft and engine maintenance services to the Australian Defence Force and international defence organisations,” Mr Joyce said.

“We have made it clear that in line with the Qantas Group’s strategy we would explore the sale of non-core assets where it makes commercial sense – just as we’ve done with the sale of our catering facilities at Riverside and Cairns as well as our share in express freight and logistics firm StarTrack.

“Qantas and Northrop Grumman will work closely over the coming months to work towards satisfaction of a number of conditions related to the separation of QDS from Qantas, which must be met to facilitate completion of the sale.”

The proceeds from this sale will be realised in financial year 2013/14.

QDS was recently awarded a contract by the Indonesian Government to provide heavy maintenance and crew training services for four C130H Hercules transport aircraft at the RAAF base in Richmond.

QDS also provides engineering support for the RAAF’s fleet of KC30A tanker aircraft, the RAAF’s VIP flight operations, and various support services on other defence aircraft and engine programs.

Northrop Grumman has indicated it expects to offer employment to the approximately 320 employees of QDS following the completion of sale.

Mr Joyce said Qantas would continue to work closely with the Australian Government and the Australian Defence Force at a strategic level on Australian aviation policy and national security.

“Qantas has a long and proud history of supporting the Australian Government and Australian Defence Force in times of need, including most recently with emergency relief flights from Cairo during political unrest in 2011 and from Christchurch following the devastating Earthquake,” he said.

“We are honoured to have been given such an important responsibility, and will continue this important role for Australia.”