Qantas fleet rebuild piece

[Peasant]

or even refurbed 788s coming over to QF

I thought this too, but was told by someone quite senior in QF fleet planning that this isn't something they have a scenario for in their plans.

 

[oz_mark]

I thought this too, but was told by someone quite senior in QF fleet planning that this isn't something they have a scenario for in their plans.

From what I have heard, mainline have never wanted the 788s.

 

[oz_mark]

news.com.au is having a go as well...

https://www.news.com.au/travel/travel-updates/alan-joyce-accused-of-leaving-a-financial-mess-for-next-qantas-ceo/news-story/603f7511d4b57cba32244897c52db5a0

 

[Assassin]

Noting in the article:

In an update in February this year, Mr Joyce said some of the new aircrafts on order would be delayed up to six months due to supply chain issues. In response, Mr Joyce said the company would wet lease more aircraft from Alliance Airlines and buy a number of secondhand A319/320s.

That's the first I've heard of that!

A couple of other points - 1. I think the A220 has a much longer range than the 717s / E190s and presumably a more efficient aircraft changes the economics on longer routes.
2. One concern about the capex is that with the retirement of the 747s and some of the A380s even on a one-for-one replacement with 787s / A350s Qantas will still have less seats available than they did pre-COVID. I get that COVID has put a dent in their plans but it would be good to see the airline getting its act together and focusing on growth.

 

[jpp42]

One concern about the capex is that with the retirement of the 747s and some of the A380s even on a one-for-one replacement with 787s / A350s Qantas will still have less seats available than they did pre-COVID. I get that COVID has put a dent in their plans but it would be good to see the airline getting its act together and focusing on growth.

I am not sure they are necessarily motivated by having as many seats as before if the yield is higher for "long and thin." I get the idea that they see the ability to run more point to point routes, with no direct competition, as the path to higher profitability. For longhaul, you can see this now with Qantas running MEL-DFW and eventually BNE-ORD on the 787, as preferable to say, double daily A380's on SYD-LAX. You can see how SYD-SFO is continually delayed as there is a competitor on that route, whereas other routes like SYD-BLR are launched in preference to say, increasing frequencies to SIN. QF9/10 to LHR has been way fewer seats that the A380 ever since it was re-routed via PER and that seems to be a winning formula, despite the LHR slot essentially costing more per passenger. Business and other time-poor travellers will pay a premium to avoid connections, and they're counting on this for regional routes with the A321XLR's and A220's as well. Long and thin is no help for the status runs though!

 

[anyonebutqantas]

They should buy more A380!

 

[ANstar]

Just remember that according to the current order book, there are only 20 A321 XLRs on order to replace 75 B737-800s between now and 2029. The bulk of 737 replacements won't happen until well into the 2030s.

They also have over 100 A321s on order for JQ and some of those will be going to QF.

 

[Peasant]

They also have over 100 A321s on order for JQ and some of those will be going to QF.

Here's the current plan for now through until FY29 for both QF and JQ.

 

[Quickstatus]

the airline getting its act together and focusing on growth.

Growth of what?. Maybe profit?.
QF is increasingly focusing on low volume but high yield passengers, and the rest can tag along if they want. The kangaroo route used to be 2xA380, now its 1xA380 and 1x789.

Basically the orders are just pie in the sky stuff until bums on seats occur.

 

[Quickstatus]

If the running cost of Alliance is cheaper, fares when booked with a QF flight number, on Alliance, should be cheaper.

Why cheaper?. It's a profit making venture and if people are prepared to pay no need to make it cheaper

 

[Doddler]

From what I have heard, mainline have never wanted the 788s.

I hope you're right, and that they shift them to JQ as the A350s come in.

 

[Quickstatus]

and that they shift them to JQ as the A350s come in.

The 787-8 have ever only been operated by JQ

 

[Doddler]

The 787-8 have ever only been operated by JQ

Ah, yes. Was thinking of 789 - doh!

 

[TomYagher]

Can’t help posting this, great laugh…made my day just a little better

Get in quick before Joyce puts the paywall back in the lounges.

Alan Joyce has had enough

The problem for people who surround themselves exclusively with sycophants is that they become ill-equipped to cope with negative feedback.

www.afr.com

 

[MELso]

A couple of other choice quotes:

The same week as the UBS downgrade, Qantas launched a major tactical advertising campaign – occupying billboards, bus shelters, printed newspapers and any website trafficking in cookies – to reassure the airline’s deeply jaded customers that it would receive “1 [new] aircraft every 3 weeks over the next 3 years.”

[UBS] estimates that 70 aircraft (or 22 per cent of the Qantas fleet by number of planes) will be retired over the 2024-2028 financial years and that Qantas will need to spend $12 billion in that period just to meet its committed deliveries and replace aircraft that have reached the hoary age of 25 years old. It would cost far, far more than $12 billion to keep the fleet at its present age.

...Shareholders don’t want Qantas to be overcapitalised and so are supportive of prolonging aircraft life (with new engines and new seats).

The rest of the argument is a post-rationalisation for extreme underinvestment designed to artificially juice profits and the share price in the final years of Joyce’s reign, right before he takes his massive sack of bonuses and pulls the ripcord on his parachute, leaving the company flying into a capex mountain.

 

[moa999]

Can’t help posting this, great laugh…made my day just a little better
View attachment 323872

A bit rich imho.

Qantas's oldest mainline aircraft is 737 VH-VXA delivered in early 2002.

All the US airlines have 737s that are a few years
older. BA has A320s from 1999 etc.

No doubt Qantas has got a lot of Capex over the short-term but it's also a lot of much cheaper narrow bodies as per the schedule thru FY29 posted #48 above.

330s will also start needing replacement towards the end of that forecast.

 

[RooFlyer]

A bit rich imho.

maybe. But both articles' main focus is the 'policy' of the current Qantas management deferring purchase of new aircraft until the last minute (this increasing average fleet age markedly) and leaving subsequent management with the issue of the expense and hit to the balance sheet.

I wouldn’t necessarily focus on Alan Joyce‘s personal gain, but he will benefit from a positive share price once his various shares etc vest. The reacent profit wouldn't have been nearly so shiny if they had to cope with the weight of new aircraft acquisition that they will in coming years. ( Yes I know that there are aircraft currently being delivered, but it’s definitely been back loaded into the future).

 

[moa999]

But it's also a question of what aircraft.

Rather than buying the recent 11 789s (+3 undelivered due to Boeing issues and Covid) Qantas could probably have bought 40-50 321/737s for the same $$s.
The latter obviously would have made for a very different fleet age outcome.

It's a function of Qantas having acquired 75 737s from 2002-2014 (helped initially by a cancelled AA order post 9/11) which created a somewhat strange window where they didn't need any narrow bodies. And given this represents 60% of their fleet, average age was likely to increase until the replacement of those aircraft started.

As airlines become more mature they tend to operate fleets that include aircraft of a mixture of aircraft.

Emirates is now flying some 777s in their latter teens for example.

 

[THR]

Emirates is now flying some 777s in their latter teens for example.

I am sure they would want to retire some but the late delivery of the new 77X's won't help (and they may switch to the 787 or A350 given their shift in order book).

 

[RichardMEL]

But it's also a question of what aircraft.

Rather than buying the recent 11 789s (+3 undelivered due to Boeing issues and Covid) Qantas could probably have bought 40-50 321/737s for the same $$s.
The latter obviously would have made for a very different fleet age outcome.

But then how would they fly the (few) international routes they have? They couldn't (economically) fly PER-LHR, and the 744's would be even older (they would not have retired them if they had no 787's!) and while all 12 380's probably would still be flying, they would still have fleet age issues - I am sure the remaining 744's would have required D checks(very expensive) and of course be well over 20 years old by that time.. so the fleet age mix would still have a skew, and QF would face a cost blow out on all the 4 engined aircraft required to fly even a reasonable schedule to key destinations like UK, SIN and USA - and the maintenance and fuel costs would be far more than the 787's (and let's forget about routes like MEL-DFW and PER-LHR as I mentioned).

Also the initial tranche of 787's (8) were ordered in 2015 - so at that point QF was catching up after missing out on the 77W's they probably SHOULD have ordered ten years earlier, but saw the success of the 787 series (iirc the 787-9 had come online in 2014 or so) and knew the writing was on the wall for the 744 fleet. At that point in time there would have been no sense looking to replace the 737 fleet which had only just completed being delivered so many were still very new.

As it is the 737's are a mix of ages that they can keep going in the main til the end of the decade (on average) and this is why the current replacement plan makes quite some sense. I mean there's no reason to retire a 2010 build 737-800 when it's only half way or so through it's anticipated working life. The oldest ones sure, they're getting up there but as noted the US airlines are flying much older 737's let alone 757/767 shells that are much older plus first gen build A32x birds.