Article: Qantas holds off on fleet purchase

[Yada Yada]

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like to start operating the new airline to leisure destinations - as well as on routes from which Qantas itself has withdrawn in recent years - by the end of next year.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.

 

[Kiwi Flyer]

Already posted by NM in the QF forum

 

[Yada Yada]

Already posted by NM in the QF forum

So I see. It wasn't there when I started posting. Oh well... Admin: feel free to delete this thread.

 

[NM]

Already posted by NM in the QF forum

I think we must have been posting concurrently! Great minds think alike! or maybe its a case of "fools never differ"? I was tossing up which forum to post it in . At least we chose different ones 8) .

 

[Yada Yada]

I think we must have been posting concurrently! Great minds think alike! or maybe its a case of "fools never differ"? I was tossing up which forum to post it in . At least we chose different ones 8) .

indeed!

 

[NM]

I think we must have been posting concurrently! Great minds think alike! or maybe its a case of "fools never differ"? I was tossing up which forum to post it in . At least we chose different ones 8) .

indeed!

Hmm, indeed what?? Concurrency ... Great minds ... or ... Fools :?:

 

[NM]

Now back to the topic 8)

Lets hope we don't have to wait until the NEXT board meeting before we are able to remove our suspenders :roll: . This is worse than the dreaded "to be continued" half way through a Get Smart episode.

 

[Kiwi Flyer]

The old play off "the other side has come up with a last minute better offer" trick.

 

[NM]

The old play off "the other side has come up with a last minute better offer" trick.

Worked for me when I bought a car, so why not when buying up to 100 aircraft?

 

[needaholiday]

Just announced on Bloomberg...Qantas Airways Limited said it Jetstar discount carrier will start flying international services by January 2007. The board of Qantas will meet Dec. 14 to discuss it's fleet orders, according to a statement released to the ASX this morning.

 

[NM]

One of the biggest points in the ASX announcements (in my opinion) is that QF FF points and Status Credits will be earned on all JetFlex and StarClass fares on JetStar International services.

If that is the case, then StarClass (premium economy) may not be a bad thing for those of use not permitted business class travel to these destinations. Of course that depends on the seat and pitch offered in StarClass. They claim it will be similar to Qantas Domestic Business Class seat, so I am assuming Millennium style seating. Also Qantas Club access for QC members. So not all bad.

 

[needaholiday]

Jetstar ASX Announcement can be read at

http://www.asx.com.au//asxpdf/20051208/pdf/3tnd6sn5g0yz5.pdf

 

[NM]

Jetstar ASX Announcement can be read at

http://www.asx.com.au//asxpdf/20051208/pdf/3tnd6sn5g0yz5.pdf

ASX announcements are only available on the day they are published. By tomorrow that link will not work. However, the same information is likely to be posted to the Qantas.com.au News pages in the next few days.

 

[needaholiday]

Good tip - didn't realise the announcements were temporary.

 

[Yada Yada]

Hmm, indeed what?? Concurrency ... Great minds ... or ... Fools :?:

I was thinking a bit of both i.e. great minds & fools! :mrgreen:

Back OT... it is a very interesting development. Even though Dixon has said that Jetstar "...would not compete on profitable routes currently flown by Qantas" and that it "...would probably never be more than 20 per cent of the size of Qantas", I find it difficult to see how it won't cannibalise QF mainline to some extent. Assuming they do not fly the same routes, pax will still find circuitous ways to get to specific destinations that might otherwise have been flown direct on QF.

I am sure Dixon was being totally honest when he said "Our whole DNA is to make sure that Qantas, the Qantas group, but particularly the Qantas brand is very successful,", but I feel it will be difficult for him to partition QF from the effect of Jetstar. I am sure the group will profit, but QF as a brand will probably suffer.

 

[oz_mark]

Now back to the topic 8)

Lets hope we don't have to wait until the NEXT board meeting before we are able to remove our suspenders :roll: . This is worse than the dreaded "to be continued" half way through a Get Smart episode.

According to the Qantas website there is a special meeting next week