Northrop Grumman to acquire Qantas division for $71 million

Aug. 30, 2013 at 8:37 AM
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CANBERRA, Australia, Aug. 30 (UPI) -- Northrop Grumman announced it agreed to acquire Qantas Defense Services, the military logistics and support business of ailing Qantas Airlines.

Northrop gave few details of the sale which, if it gets regulatory approval, is expected to be completed next year.

Wes Bush, Northrop Grumman chairman, chief executive officer and president, said QDS is expected to boost Northrop Grumman's international growth in the key areas of unmanned, C4ISR, cyber, logistics and modernization products and services.

The Age newspaper reported that Qantas Chief Executive Alan Joyce said the sale was for around $80 million Australian -- around $71.5 million -- and is part of the airline's strategy to jettison divisions that aren't part of its core domestic passenger business.

Joyce said Northrop Grumman is expected to keep on the 320 QDS employees, most of them working at the division's main operations center in Richmond in western Sydney.

Joyce said QDS will be renamed, The Age reported.

The sales agreement comes as Qantas edges back into the black, posting a modest full-year net profit of $6 million Australian, a year after recording a historic loss of $244 million Australian.

Despite tough competition on international and domestic routes and high fuel prices, Qantas more than doubled its underlying earnings to $192 million, The Age reported.

QDS, set up by Qantas in 1999, has sales of around $140 million Australian.

It provides maintenance, supply, deep maintenance and training support to major defense aerospace systems. These include Allison/Rolls-Royce T56 engines and Roll-Royce Turbomeca Adour engines. QDS also carries out conversion work and through-life support for the Airbus-derived KC-30A Multirole Aerial Tanker Transport.

QDS provides through-life support for the C130H Hercules and support for Boeing's 737 BBJ business jet and Bombardier's VIP Challenger CL604 aircraft.

Australian Aviation magazine reported that QDS recently won a contract from the Indonesian government for heavy maintenance and crew training for four C130H Hercules transport aircraft. The contract is being carried out at the Australian air force base in Richmond.

Northrop Grumman has been working on a biometric information system for the Australian Department of Defense since last year.

A proof-of-concept was delivered in December to the Chief Information Officer Group, Australian Department of Defense, under a one-year contract.

The system will produce biometric information for face, finger, iris and palm records, Northrop Grumman said in a statement.

The Australian system is modeled after the U.S. Department of Defense Automated Biometric Identification System, for which Northrop is the prime contractor, Northrop said.

The U.S. network-centric system is accessible worldwide and interfaces with other U.S. government agency data systems.

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