David Eyre 
Qantas Group has ordered 78 A320neos and taken options on another 194. Engine choice is yet to be decided.
Up to 32 of the current A320 model have also been ordered.
Photo © Airbus
Four Qantas 747-400s are to be retired by June 2012 as part of the changes, whilst the other 23 will receive A380-style cabins and seats.
Photo © Les Bushell
Qantas is delaying delivery of its last six A380s, which were originally to be delivered from 2014, for 5-6 years.
This is to save costs and schedule delivery to coincide with retirement of the Qantas’ six Boeing 747-438ER aircraft.
Photo © David Eyre
16 Aug 2011:
Qantas made an early announcement on its highly controversial “New Spirit” restructuring – the airline had previously advised that the announcement would be made on 24 August.
Key points are:
Massive A320 order, including A320neo:
Orders placed for 78 Airbus A320neo (New Engine Option), plus another 194 purchase rights or options.
Orders placed for 28 current generation Airbus A320s, with another 4 to be either purchased or leased. The first of the A320s will be allocated to the new Jetstar Japan, which starts operations in 2012.
Delayed delivery of six Airbus A380s:
Deferred delivery of the last six Airbus A380s for up to six years to save costs and help pay for the A320 order. Qantas currently has 10 A380s, with another two due for delivery by the end of 2011 and two more by mid-2013, bringing its total A380 fleet to 14. The deferrals affect the final six A380, which were to be delivered from 2014. The delivery of the last six A380s will now be timed to coincide with retirement of Qantas’ six Boeing 747-400ERs.
A380s will now mainly be used on the routes between Australia and London (via Singapore), and Australia to Los Angeles.
Four Boeing 747-400s to be retired during 2011/12 financial year
Four 747s will be retired as a direct result of the cessation of Qantas services on London-Bangkok and London-Hong Kong.
23 Boeing 747s to undergo A380-style cabin refurbishment
Apart from four 747s which are to be retired, the remaining 23 will be refurbished with A380 seats and interiors, and new Panasonic inflight entertainment. The first 747 is already being refitted at Avalon and will enter service within three months. The 23rd and last refitted 747 will enter service by June 2014.
New premium Asian-based airline to be established
This new premium airline cannot use the Qantas name, due to Qantas Sale Act requirements. It is to be based in Kuala Lumpur or Singapore, and will be a joint-venture – Qantas will own 49%, with an un-named partner airline to own the rest.
This airline will be geared to serve the Chinese market, but will also fly routes to Australia and Asian cities.
Jetstar Japan to be formed
This is a joint venture with Japan Air Lines and Mitsubishi, of which Qantas will own 42%. This airline will be based in Tokyo-Narita and Kansai International, to start flying from late 2012 on domestic and short international routes. It will use three Airbus A320s initially, but has plans to increase the fleet to 24 aircraft within its first few years.
Loss of 1,000 jobs in Australia
The job losses result mainly from Boeing 747 retirements and route changes. Qantas claims that these job losses will be achieved mainly through voluntary redundancies. Jobs lost will include pilots, cabin crew, engineers and management.
Jetconnect to get more Boeing 737-800s, replacing older 737-400s
Boeing 787 orders unaffected
Boeing expects to deliver the first Boeing 787 by the end of 2012, but Qantas realistically expects delivery in January or February 2013. The first 787s are earmarked for Jetstar, allowing Jetstar’s Airbus A330s to be returned to Qantas.
However, Qantas said that 787 deliveries “like all aircraft orders, will be reviewed as required.”
Route network changes
Qantas will cease its own services between Bangkok – London and Hong Kong – London, and instead will codeshare on Oneworld partner British Airways for these segments. Qantas says these routes are making losses and will enable retirement of some 747-400s, together with the associated jobs. The valuable London-Heathrow landing slots will be retained by Qantas for future use.
In exchange, British Airways will cease flights to Sydney from the Bangkok and Hong Kong, and BA will increase frequencies on the London-Hong Kong sector from 14 to 17 per week. Both Qantas and BA will continue to operate London-Australia via Singapore, and BA will swap from Boeing 777s to Boeing 747s on the London-Singapore-Sydney route.
Qantas will code-share on Malaysia Airlines to fly passengers to Amsterdam, Istanbul, and Rome.
Qantas will stop flying to Buenos Aires (Argentina), and instead fly to Santiago (Chile) to connect with services operated by Oneworld partner LAN Chile. Santiago will then become Qantas South American gateway.
No other routes are affected at this stage.
Next Gen Check-in to be used for international flights
Next Gen Checkin to be expanded for international flights, beginning with New Zealand.
New First Class lounges
New Marc Newson-designed First Class lounges will be established in Hong Kong, Los Angeles, and Singapore.
Controversy
The changes announced by Qantas have been questioned in the media by airline industry observers.
Some are questioning why Qantas management never ordered the Boeing 777-300ER or -200LR. Cathay Pacific, Emirates and Singapore Airlines have all demonstrated the value of the 777-300ER, which can carry near-747 sized passenger loads at 30% lower cost, with more underfloor freight space, for longer distances than 747-400s. This makes more routes economically viable, with higher frequencies.
Some have noted that of the 110 new aircraft just ordered and also the initial new Boeing 787s, none will be going to Qantas’ International Division. Boeing 747 cabin refits will be the only change to benefit the international operations. Qantas has also been criticised for being slow to upgrade its aircraft cabins to compete with other airlines.
Qantas’ proposed new route structure forces passengers to switch to another airline to fly to most destinations – effectively handing customers to its competitors. Most passengers prefer to fly an entire trip using one airline. Qantas also announced that 82% of international passengers flying from Australia choose airlines other than Qantas. Whilst the CEO points out that Qantas cannot fly to every city, fleet choices have significantly limited the route network.
Other observers are questioning why the International Division is making a large loss, pointing to ” hidden costs” of supporting Jetstar and its rapid growth, at the expense of Qantas. The creation of subsidiary airlines in Japan and South-East Asia is also seen by many as outsourcing Australian jobs to take advantage of cheaper labour with lower employment conditions. Qantas has had an increasingly bitter relationship between the CEO and the airline’s pilots and engineers.
NOTE: The above does not represent the views of the Aviation Association of WA Inc, and is purely a collation of opinions expressed by industry observers in the media.
