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Airlines

Qantas Delays Fleet Upgrade Decision Amid Boeing and Airbus Battling for Contract

Strategic Insights

— 1 min read

Qantas executives failed to sign off on a deal during a marathon board meeting on Wednesday, prompting the airline to delay a decision on a planned ADollars 20bn (USDollars 15bn) fleet upgrade until next week. Boeing and Airbus have been vying for the contract to provide Qantas's next generation of around 90 aircraft, with the airline's directors seeking further clarification on late revisions made by both manufacturers. In the meantime, Qantas has announced that its no-frills subsidiary, Jetstar, will begin long-haul international services by January 2007, with a route structure requiring 10 aircraft and a focus on point-to-point routes between Australia and Asian and Pacific cities.

Key Takeaways:

  • Qantas has delayed a decision on a planned ADollars 20bn (USDollars 15bn) fleet upgrade until next week due to disagreements between Boeing and Airbus over the contract for 90 aircraft.
  • The airline's board will reconvene for a special meeting on December 14 to "further consider its long-term fleet plan" and make a decision on the final aircraft purchases, including for Jetstar's international operations.
  • Qantas and its executives are considering two options for the airline's new aircraft: Boeing's ultra-long-range 777-200LR and Airbus's A340-500, as well as Boeing's 787 Dreamliner and Airbus's fuel-efficient A350.
  • Jetstar's initial route structure will require 10 aircraft and involve point-to-point routes between Australia and Asian and Pacific cities, with subsequent expansion to European and other destinations.
  • The airline's international operations will be based in Melbourne under Jetstar's existing Australian management, with Alan Joyce as chief executive, and will create an additional 50 jobs immediately.

Statistics:

  • ADollars 20bn (approx. USDollars 15bn): the total value of Qantas's planned fleet upgrade.
  • 90: the number of aircraft Qantas is seeking to replace.
  • 10: the number of aircraft required for Jetstar's initial route structure.
  • December 14: the date set for Qantas's special board meeting to make a decision on the fleet upgrade.
  • 2007: the year Jetstar will begin long-haul international services.

Sources:

  • "Qantas delays fleet deal by a week" by Joe Aston (published in The Australian newspaper, date not specified).
  • Statement by Geoff Dixon, Qantas chief executive (released on Thursday morning in Australia, date not specified).

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