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Qantas has announced the sale of its wholely owned subsidiary Qantas Defence Services (QDS) to Northrop Grumman Australia as part of its full-year results. The $80 million sale includes 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 with locations in Sydney, Brisbane and Canberra.
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, and provides engineering support for the RAAF’s fleet of KC-30A tanker aircraft, the RAAF’s VIP flight operations, and various support services on other defence aircraft and engine programs.
Qantas Group chief executive officer Alan Joyce said he was pleased with the agreement that had been reached with Northrop Grumman.
“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,” Joyce said.
“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.”
Northrop Grumman has indicated it expects to offer employment to the approximately 320 employees of QDS following the completion of sale.
John N
says:This is probably a smart move by both parties.
Apart from inheriting the current contracts and workload from QDS, NG will probably see an increase in defence related business in the coming years, and Qantas can concentrate on it’s core business.
NG is in the running for supplying Australia with the MQ-4C Triton, having a local operation for support and upgrades would be an advantage.
NG is a major supplier of much of the airframe components that go into making Super Hornets and Growlers, they supplied the MESA radar for the E-7A Wedgetail.
NG makes the centre fuselage and also the AESA radar for the F-35, more defence work to support when the F-35A’s are in RAAF service.
It was also involved with EADS in offering the KC-30 for the USAF KC-X competition, if the Government ever decided to order more KC-30A’s, together with the fact that QDS did the conversions, depth of knowledge.
Again, I think this is a smart move by both parties.
Cheers,
John N