Qantas Kicks Off 100-Plane Order Worth More Than $9 Billion
(Bloomberg) -- Qantas Airways Ltd. kicked off a process to buy more than 100 new planes worth in excess of $9 billion as it pushes ahead with plans to start ultra-long flights halfway around the globe.
The airline will bring in the new aircraft by 2034 to renew its aging domestic fleet of Boeing Co. 737-800s and smaller Boeing 717s. Qantas is weighing up Boeing’s 737 Max and Airbus SE’s A320 and will pick a winner in December, Chief Executive Officer Alan Joyce said on a call Tuesday.
Meanwhile, non-stop Qantas services connecting Sydney with New York and London, a project that had been thrown into doubt by Covid-19, are due to start as soon as 2024. Qantas had picked Airbus’s A350-1000 for the flights -- set to be the world’s longest -- and will decide on a jet order in early 2022.
With border restrictions easing in major air-travel markets, Qantas’s announcements represent one of the biggest bets on a rebound in demand since Covid decimated aviation. The airline is hoping international passengers will increasingly opt for services without stopovers, shoring up the business case for unprecedented ultra-long routes that command higher fares.
“More and more people will want to fly direct,” Joyce said. “That’s going to be even more sought-after in a post-Covid world.”
Qantas is replacing 75 Boeing 737-800s, the backbone of its domestic fleet, and 20 smaller Boeing 717s. As well as Boeing’s 737 Max and Airbus’s A320neo, Qantas is assessing the smaller Embraer E-Jet E2 and the Airbus A220 as potential new aircraft. Deliveries and payments for the new planes will start in the year ending June 2023.
The jets will form the core of Qantas’s domestic fleet for the next two decades. Chief Financial Officer Vanessa Hudson said on the call that she’s expecting a “substantial discount” to the list price for new aircraft, though declined to put a value on any new order.
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