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Qantas Airways Ltd. 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. Dnata, an aviation-services company, will supply catering for Qantas flights for an initial period of 10 years. The transaction value wasn’t disclosed.

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.

©2018 Bloomberg L.P.

This article was written by Angus Whitley from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

Photo Credit: A first-class meal on a Qantas flight. Qantas will sell its catering division to Emirates Group to spend more on developing its premium products instead. Bloomberg