Perth Airport Gives Qantas Notice Of Lease Termination

The feud between Qantas and Perth Airport has escalated a notch further. On Friday, the airport issued 30-day termination notices to the airline, advising it would not be renewing the carrier’s holdover leases. Qantas said these amount to eviction notices and warned that if they are not withdrawn, the airline could cease operations at Perth within two weeks.

Qantas Perth Airport breach notices
Perth Airport has issued breach notices to Qantas Photo: Bidgee via Wikimedia Commons

In the most recent chapter of the quarrel between the Australian flag-carrier and the Western Australian capital’s airfield, Perth Airport last week issued breach notices for non-payment on the airline’s leases. Qantas holds 39 leases at the airport; 21 of these are current, and the other 18 are short-term so-called holdover leases.

30-day notices on leases

Perth Airport chief executive Kevin Brown said action had to be taken, and Qantas had been served breach notices for non-payment on current leases and 30-day notices that all holdover leases would not be renewed. In a statement issued on Perth Airport’s website, the CEO states that:

“As Qantas has unilaterally given itself a 100% rent waiver, with no negotiation, on all 39 leases at Perth Airport in breach of their contractual obligations, Perth Airport has had no option but to serve breach and termination notices (with up to 30 days’ notice).”

As reported by the Syndey Morning Herald, Qantas described the letters as “eviction” notices and warned if they were not withdrawn, Qantas, QantasLink, and Jetstar would be forced to cease operations through Perth within a fortnight.

“Qantas has struck deals with most airports around Australia, and is in productive negotiations with the rest, following the terrible impact of the coronavirus on airlines,” Richard Goyder, chairman of Qantas, was quoted as saying. “Perth Airport is the exception and has responded to Qantas’ request for rental abatements by issuing a series of eviction notices that would shut us down in WA.”

Western Australia premier Mark McGowan pleaded with both companies to resolve the issue as soon as possible as the dispute was severely threatening the WA economy and was “completely unacceptable.”

Simple Flying has sought Qantas for a comment but was yet to receive a reply at the time of publication.

Qantas said it may cease operations at Perth within a fortnight. Photo: Phillip Capper via Flickr.

350 flights a week

Tensions between the two have reached a breaking point following an ongoing dispute where Perth Airport claims that Qantas owes it AU$20 million ($13 million) in unpaid aviation and rental fees since February. This in addition to an ongoing court case in which Perth is asking for AU$11 million ($7.2 million) in unpaid aeronautical fees.

Despite a near-collapse in domestic and international travel, Qantas still operates about 350 flights per week from Perth Airport. Most of these are so-called fly-in fly-out (FIFO) flights, transporting key workers important for Western Australia’s mining economy.

Mr. Brown said the airport would not touch leases that impacted vital freight, repatriation, and FIFO flights.

Qantas recieves breach notice Perth airport
Qantas still operates 350 flights a week out of Perth. Photo: mailer_diablo via Wikimedia Commons

Terminal 4 lease take-over

Back in January, Perth Airport also retook the lease that Qantas held for its Terminal 4. This move still seems to be a source of contention whether or not Perth owes Qantas funds for upgrades done to the building.

“In a letter to Perth Airport dated 27 April, Qantas restated its demands in the guise of a request for support, and falsely linked its payment of outstanding aviation charges to the Terminal 4 valuation issue. There is no outstanding specific debt owing for T4.” Perth Airport commented in the statement.

Perth Airport has not been on very friendly terms with is airline colleagues of late. And this is undoubtedly not the last we will hear in the ongoing dispute between the Western Australia airport and its inhabitants. Stay tuned for further updates.