Sydney Airport takes over control of terminal T3

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Sydney Airport takes over control of terminal T3

Sydney Airport announced that it has reached a landmark agreement with Qantas to take control of the terminal T3 almost four years ahead of the previous lease term, for A$535 million.

This is a positive outcome for Sydney Airport investors, as the transaction is EBITDA and cash flow accretive from year one.

Sydney airport will use A$106 million from its cash reserves, A$60 million from its Distribution Reinvestment Plan and A$369 million from bank debt.

Sydney Airport managing director and chief executive officer Kerrie Mather said:

"We're delighted with the outcomes for both Sydney Airport and Qantas, resulting from a longterm, collaborative engagement. The agreement provides an equitable and fair outcome for both parties, as well as certainty for passengers and other airport users."

Welcoming the agreement, Qantas Group CEO Alan Joyce said:

"This deal secures Qantas' long-term position in our largest domestic hub, ensuring priority usage as the primary airline customer of Sydney Airport's T3. "We now have certainty about our future operations in T3 beyond 2019, and an outcome that is win-win for both Qantas and Sydney Airport."

The terminal is approximately 74,000 square metres and includes 17 gates, 24,000 square meters of office and other leasable space, 51 commercial outlets, three lounges and 120 valet car parking spaces. The fixed property rental Sydney Airport previously received will cease and new variable aeronautical, retail and property revenue streams, as well as operating expenses, will commence on completion, expected 1 September 2015.

"We are excited to now have 100% of our terminal footprint, to work closely with Qantas and from 2019 other airline partners using Terminal 3, and we look forward to continuing to provide passengers with a world-class experience," Ms Mather added.

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