Qantas hits pause on new Boeing 787, Airbus A321neo jets

Financial prudence trumps factory-fresh planes as Qantas charts a course to, and through, air travel's uncertain future.

By David Flynn, May 11 2020
Qantas hits pause on new Boeing 787, Airbus A321neo jets

Qantas will join other airlines around the world in pushing back on the delivery of new jets until the worst of the coronavirus has passed and the shape of the post-pandemic travel market is clearer.

Qantas will defer the delivery of its last three Boeing 787-9 aircraft due to arrive by the end of this year, which would have seen the Dreamliner fleet top out at 14 and allow the retirement of the Boeing 747s – although the now-grounded jumbo jets are now less likely to be put out to pasture than simply not return to the skies at all.

Also put on ice: Jetstar's Airbus A321neo LR aircraft, the first of which was slated for delivery in August with all 18 streaming through by the middle of 2022.

The long-range jets, decked out in a 232 seat all-economy configuration, were earmarked for a mix of domestic and selected international routes such as Sydney to Bali, along with potential new low-cost corridors such as Melbourne-Fiji and Cairns-Auckland.

A Qantas spokesman confirmed to Executive Traveller that the airline has advised Airbus and Boeing it won’t be taking delivery of any new aircraft in the short term.

An unsteady return

Most of the airline's jets are already grounded, awaiting the gradual return of domestic travel, but international travel – barring the opening of a local 'bubbles' to the likes of New Zealand and other nearby Pacific islands – isn't expected to resume until 2021, while a stabilised 'new normal' may not arrive until 2023.

Qantas Group CEO Alan Joyce last week said the airline had acted quickly to conserve cash, hitting pause on almost all capital and operating expenditure as well as implementing employee stand-downs, and raising $1.6 billion in loans against ten of its Boeing 787-9s as it weathers the coronavirus storm.

"It is hard to predict what the demand will look like and recovery is likely to be slow," Joyce admitted.

"There's a lot we don't know about life on the other side of the crisis, but our starting assumption has to be that the market won't return to demand levels we had going into the crisis. The market will probably be smaller for some time."

Despite a forecasted "net cash burn rate of $40m a week by the end of June", Joyce said this was "a lot lower than most airlines around the globe, and we have a light at the end of the tunnel with domestic and trans-Tasman markets potentially opening up before any other markets."

Reshaping and right-sizing

Joyce told Executive Traveller that the airline would launch a sweeping review of its entire international fleet to reshape the airline around post-coronavirus travel demand, because "the Qantas of 2021 and 2022 will not be the Qantas of 2019."

This could include fewer Airbus A380s, with the airline halting its refurbishment plan – only six of the 12 superjumbos have been upgraded with new business class seats and inflight lounges to free up cash in the short term, until it's determined how many A380s will be needed in this uncertain future.

"There is a potential to bring all 12 (A380s) back (into service), but there is a potential to bring less than 12 back," Joyce says of the airline's flagship jets. "That will depend on what the recovery scenario looks like."

Joyce also confirmed that ambitious plans for non-stop Project Sunrise flights to London, Paris and New York have been put on hold, along with an order for the Airbus A350-1000 jets which would have tackled the marathon 18-20 hour journeys.

"We do think there is a huge potential for Project Sunrise but the time is not right now, given the impact that COVID-19 has had on world travel," Joyce reflected. "But we do think there's still a good business case for it, and a good opportunity."

Read more: Coronavirus puts Qantas Project Sunrise on hold

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

22 Sep 2017

Total posts 22

Qantas could switch to A321XLR for JetStar to Singapore, KL, Bali. More comfortable than competitors' 9-abreast A330 and probably cheaper per seat as well.

Qantas - Qantas Frequent Flyer

01 Aug 2013

Total posts 16

I thought Jetstar did already pull out of SIN with QF flying there again through to LHR. I believe the XLR was slated to be doing SYD/MEL to DPS in the initial announcement. But I might be wrong there.

12 Dec 2012

Total posts 967

JQ pulled the 787 MEL-SIN route. They still (normally) have the A320 DPS and PER SIN routes.

12 Feb 2015

Total posts 88

I wonder whether the Qantas group will still be paying for the new aircraft. The story just says 'it won't be taking delivery'. You'd think that Qantas have contracted to buy the aircraft and Boeing and Airbus have committed funds already to build them, so it's unlikely that Qantas will be totally off the financial hook. Perhaps the major issue is that Qantas would have a real problem finding and paying for somewhere to park them, so it's better to leave them with the manufacturers? Or perhaps the Boeing and Airbus production lines have been hit pretty hard by the virus, so everyone is happy to negotiate a deferral?

31 Jan 2013

Total posts 38

I find it odd that all the A321s have been ordered Economy only. They are too long range to waste on most domestic routes, and the longer international routes mentioned all have a need for at least a Premium Economy zone. Look at Scoot, AirAsiaX, etc who all have one. And with the QF A330s not having a Premium cabin either, QF/JQ are losing a big mid-price market to other carriers.

12 Dec 2012

Total posts 967

Agreed.

When I'm not on my normal round-the-world business class holiday, I'm flying premium economy. As the Qantas A330s don't have a Premium Economy cabin, I won't book them and will book with someone who does, like Japan Airlines.

Virgin Australia - Velocity Rewards

17 Aug 2017

Total posts 22

All JQ 787-8 will end up at Qantas.

Qantas

19 Apr 2012

Total posts 549

Luke interesting on how they are configured for range, but I'm sure airbus can make the adjustments. In theory longer range than 78-9 but they may have been modified for shorter range work.

20 Oct 2017

Total posts 2

Qantas is playing this as if it were a poker hand. It will wait to see how other players lay down their fleet cards. Boeing and Airbus are just dealers.


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