Qantas Airways agreed to sell its catering division to an Emirates Group business to divert cash to areas such as premium lounges and ultra-long-haul routes.
About 1,200 Qantas employees will transfer to Dnata, the Australian airline said in a statement Wednesday.
Qantas’ catering businesses include wholly-owned subsidiaries Q Catering Limited and Snap Fresh Pty Limited. Q Catering has centres in four Australian ports – Sydney, Melbourne, Brisbane and Perth, with its largest airline customer being Qantas.
Snap Fresh is a state-of-the-art meal production plant in Queensland, specialising in Australian-made frozen meals for airlines and customers in the healthcare and food retail industries.
Dnata, the Dubai-headquartered aviation-services company, will supply catering for Qantas flights for an initial period of 10 years, and Qantas will continue to work with key suppliers in menu design and development. The transaction value wasn’t disclosed.
The agreement is subject to approval from the Australian Competition and Consumer Commission (ACCC).
Dnata already operates 11 catering facilities in Australia, currently trading under the Dnata catering brand (recently rebranded from Alpha Flight Services).
Dnata employs more than 4,000 people in Australia across its catering, cargo and ground handling businesses.
Over the past 12 months Dnata has invested significantly in growing its global catering network.
Its most recent milestones include the opening of a catering facility in Dublin, Ireland, the opening of its $50m Melbourne catering facility and an agreement to acquire New York-based caterer 121 inflight catering. It is also currently constructing a facility in Vancouver, Canada.
Qantas has sold non-core assets in the past few years including a military aircraft services division as it focused on bolstering earnings through premium customers and direct flights to far-flung destinations.
The carrier’s catering division, with facilities in Sydney, Melbourne, Brisbane and Perth, is a capital-intensive operation that requires specialist vehicles to load aircraft and food-preparation sites to be near an airport.
Dnata serves more than 320,000 meals a day, according to its website. The Australian carrier says its catering business produces more than 34 million meals annually for Qantas and other airlines each year, equivalent to about 93,000 a day.
Last month, Qantas began flying between Perth and London, the first non-stop passenger services to connect Australia and Europe. The carrier said it plans to start a Melbourne-San Francisco service in September, and is also considering direct flights to Chicago.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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