It’s Airbus vs Boeing in Qantas’ order for over 100 new jets

The massive domestic fleet renewal program could be worth as much as $14 billion at list price.

By David Flynn, October 5 2021

It’s Airbus vs Boeing in Qantas’ order for over 100 new jets

Over 100 new jets for Qantas regional and domestic services from end of 2023
Airbus A320neo vs Boeing 737 MAX to replace Boeing 737-800s
Airbus A220 vs Embraer E-Jet E2 to replace Boeing 717s

Qantas will order more than 100 new jets in a sweeping upgrade of its domestic fleet, with Airbus, Boeing and Embraer all vying for a share of the lucrative and highly prestigious contract.

The airline is seeking to renew its primary Boeing 737 jet workforce along with part of its regional QantasLink fleet, taking advantage of a Covid-driven slump in jet sales to nail down the best price.

Although first deliveries would begin in late 2023, the extensive program – which Qantas has dubbed Project Winton, after the airline's birthplace in outback Queensland – would stretch through to 2034.

"It's only once in a generation you go through a major fleet renewal like this," said Qantas Group CEO Alan Joyce. "This is a really strategic decision for our future."

While aircraft deliveries and payments would be spread across ten years, "the equally long lead time means we need to make these decisions soon."

Qantas Group CEO Alan Joyce is looking to the future of the domestic fleet.

In the wake of Covid, Joyce maintains "there aren't many airlines around the world in a position to place orders for new aircraft... we know travel demand will rebound quickly and right now we're in a strong position to secure the best possible deal at very good prices."

Qantas has shortlisted the Airbus A220 and A320neo, Boeing 737 MAX and Embraer E-Jet E2 families for its new domestic fleet.

These new-generation aircraft are not only more fuel-efficient than the planes they're replacing, but are generally quieter and boast a modern design aesthetic which places increased focus on the passenger experience.

Based on an order of 100 jets split between the regional and mainline fleets, the prize could be worth around A$14 billion (US$10 billion) at average list prices, although airlines typically see discounts of over 40% off the sticker.

It's a once-in-a-generation opportunity for the winning aircraft manufacturer, but the clock is ticking: Qantas expects to make its final decision by the end of 2021, and place firm orders by mid-2022 for first delivery some 18 months after.

However, replacing those 75 Boeing 737s and 20 Boeing 717s won't necessarily be a like-for-like swap.

The varying models in each jet family offers flexibility in the final mix, which will also need to "allow room for the growth that we expect over the next decade and beyond," Qantas Group CFO Vanessa Hudson allowed.

"The mix of aircraft we're considering means we’ll have more operational flexibility," Joyce added, "which for customers translates into more direct routes to smaller regional centres and more choice of flights throughout the day."

Airbus A320neo vs Boeing 737 MAX

With 75 red-tailed Boeing 737-800s dominating Australian and short-range international routes, this is the main game – and the 'brass ring' prize for Airbus or Boeing as Qantas' workhorse for several decades to come.

Airbus will position its increasingly popular A320neo family – specifically the A320neo and A321neo – against the beleaguered Boeing 737 MAX (with the MAX 7, 8, 9 and 10 all under consideration).

The Airbus A320neo family could be the passenger's pick.

Those six models span from 138 seats (Boeing 737 MAX 7) to 220 seats (Airbus A321neo) in a two-class layout, compared to the 174 seats of the Qantas Boeing 737-800s, giving the airline plenty of scope for 'right-sizing' – which could also mean upsizing from the 737-800 to the A321neo.

The A320neo and A321neo arguably offer a better experience for the traveller: while having a slightly wider cabin footprint than the Boeing 737 MAX (3.7m against 3.53m), the sense is one of greater overall space and 'roominess'.

The Airbus Airspace treatment on Lufthansa's latest A321neo.

Airbus' specialised Airspace cabin design for the A320neo series features slimmer sidewall panels for extra personal space at shoulder level, better views through the windows with redesigned bezels and completely integrated window shades, larger overhead bins for 60% more carry-on, and new lavatories with hygienic touchless features and antimicrobial surfaces.

But there'd be significant operational costs in moving from the long-established Boeing 737 family to the Way of Airbus – and the airline's history and familiarity with the 737, which it's been flying since 1993 with the first 737-300, will make this more Boeing's deal to lose.

The Boeing 737 MAX has both history and a handicap.

Yet Boeing is also burdened with the reputation of the MAX after the jet was grounded globally for almost two years, after two fatal crashes took the lives of 346 people.

Time – and doubtless, some customer surveys – will tell if passengers might still be cautious about stepping onto a Qantas Boeing 737 MAX in two years' time.

Airbus A220 vs Embraer E-Jet E2

The regional contest – to replace 20 ageing Boeing 717s – will be between the smaller Airbus A220 and the Embraer E2 series.

The A220 was specifically designed for the 100-150 seat market segment and has found favour with several North American and European airlines including Delta Air Lines, Air Canada, Swiss, Air France, JetBlue and US startup Breeze.

Alan Joyce likes everything about the Airbus A220, except for the price tag...

Joyce was noticeably impressed with the A220 during a Sydney demonstration flight in 2019, calling it "a great replacement to the Boeing 717 – not too dissimilar in configuration, but with a lot more overhead bin space, a lot more space in the cabin, even the toilets are big."

The Airbus A220 has a 2-3 seating layout.

"It looks like a very good aircraft, it's very quiet, and I think passengers will love it," he told Executive Traveller.

About the only thing he wasn't keen on was the price, which at the time listed at US$81-US$91.5 million.

"What Airbus has to get right is the pricing, it's priced very high, and for us to buy it it has to be a lot cheaper than the prices we've been seeing."

Read: Qantas could buy the A220, so here's what it's like to fly

Qantas is already flying the Embraer E190 on selected regional routes.

However, the airline is now gaining first-hand operating experience with the Embraer E-Jet through its partnership with Alliance Airlines, which has added leased Embraer E190s to the QantasLink fleet.

Read: What it's like to fly on the new QantasLink Embraer E190

As a Boeing 717 replacement, Qantas has called out the second-gen E2 series: specifically the E190-E2 and the E195-E2, but not the smaller and still-delayed E175-E2.

While the Boeing 717 has 125 seats in a single-class build, the E190-E2 comes in at 'up to 114 seats', and the E195-E2 at 'up to 146 seats' – although this doesn't mean Qantas would drop business class from any E2s it buys.

Embraer's second-gen E2 family.

Where the Airbus A321XLR fits in...

Qantas also holds an order for 36 of Airbus' extended-range A321XLR jets to be delivered from 2024, with the potential for these to be shared between Qantas and its low-cost arm Jetstar, but these are intended for more substantive international routes.

Although the order was placed by the Qantas Group, which encompasses current A321 stalwart Jetstar, group CEO Alan Joyce has left the door open to the A321XLRs joining the red-tailed Airbus A330 fleet for flights into Asia.

The Airbus A321XLR is also headed for Qantas' hangars.

“We'll take a decision closer to the time about which parts of the Group will use these aircraft, but there is plenty of potential across Qantas and Jetstar," Joyce remarked when the order was inked in June 2019, adding that the A321XLRs could either replace older aircraft "or whether they are used for growth, which will depend on what’s happening in the market."

"It can fly routes like Cairns-Tokyo or Melbourne-Singapore, which existing narrow-bodies can't," Joyce said of the long-legged single-aisle jet, "and that changes the economics of lots of potential routes into Asia to make them not just physically possible but financially attractive."

More to follow...