Qantas holds off on fleet purchase
Steve Creedy, Aviation writer - December 08, 2005
QANTAS is believed to have ended a marathon board meeting yesterday without finalising its $15-20 billion fleet plans.
Late revisions by manufacturers Boeing and Airbus reportedly left the board unable to sign off on a deal yesterday, and an announcement was believed to be imminent.
The campaign to secure the Qantas business has been described as the closest fought in the airline's history and is attracting interest from around the world. The order adds to the $18 billion that Qantas is already spending on fleet modernisation (up to the year 2010) and will be funded out of operating cash flow.
Qantas is keen to secure "hub-busting aircraft" that will allow it to operate non-stop flights on long routes to Europe and the US, possibly including the holy grail of London-Sydney.
At the same time, it needs the smaller, fuel-efficient new aircraft to keep costs down on international routes and to remain competitive.
The fight to get into Qantas books sees Boeing's ultra-long-range 777-200LR pitted against Airbus's A340-500 and the fuel-efficient A350 squaring up to Boeing's 787 Dreamliner.
Some Qantas insiders believe that Boeing will get the lion's share of the order, but concede it is also possible the airline will opt for planes from both manufacturers, much as it did with its $18 billion order in 2000.
The fleet decision is closely linked to the airline's plans to take its low-cost offshoot, Jetstar, international. Although a Qantas spokeswoman was unable to comment on the Jetstar proposal, the board is likely to have given the concept the green light.
Jetstar International could ultimately account for as much as 20 per cent of the Qantas Group's international flying, according to Qantas chief executive Geoff Dixon.
The two-class carrier would be the world's first global low-cost carrier, aiming at international routes within 10 hours of Australia that are not viable for the mainline operation.
Qantas would like to start operating the new airline to leisure destinations - as well as on routes from which Qantas itself has withdrawn in recent years - by the end of next year.
Over the new fleet, one school of thought is that Qantas may decide between the A350 and the 787 to safeguard available manufacturing slots, but deferring a decision on the bigger aircraft.
The 787, due to enter service in 2008, and the A350, scheduled to start flying in 2010, have both been attracting keen interest from airlines wanting to cut operating costs.
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