Qantas to Focus on Domestic Growth by New Orders

The Qantas Group announced an update to its fleet plan to capitalise on growth in Australian domestic markets.

Qantas will lease an additional five Boeing 717 aircraft and purchase three Bombardier Q400 aircraft, due to start arriving from the second half of 2013.

Qantas Group Chief Executive Officer Alan Joyce said the new aircraft would strengthen what was already Australia’s leading domestic aviation network.

“Over the past five years we’ve invested in our successful domestic airlines to support business travel between major capitals and regional communities, as well as in the fast-growing intrastate markets of Queensland and Western Australia,” Mr Joyce said.

“This expansion to our fleet of 125-seat Boeing 717s and 74-seat Q400s gives us flexibility to pursue growth opportunities in a range of short-haul markets.

“It is a sensible investment in a part of the Qantas Group that is delivering strong returns.”

The Qantas Group has also made a change to its international fleet plan, with the cancellation of a single Boeing 787-8 Dreamliner on order for Jetstar.

The remaining 14 B787-8s will be delivered to Jetstar as planned, with the first aircraft to arrive in mid-2013. This will enable the gradual transfer of Airbus A330 aircraft from Jetstar to Qantas Domestic and the retirement of Qantas’ Boeing 767 fleet.

Mr Joyce said the cancellation of one B787 took advantage of flexibility in its fleet plan and contract with Boeing.

“The original 787 order for Jetstar was designed to replace all 11 of its existing A330s that are used for long haul services plus provide another four lines of flying for future growth.

“While the plan is for Jetstar’s long haul network to keep expanding we are using the flexibility in our agreement with Boeing to cancel a firm order knowing that we can replace it with one of our 50 options for this aircraft down the track, and with a full view of what market conditions are like at the time,” added Mr Joyce.

Jetstar’s short haul growth plans continue to be supported by the Qantas Group’s existing order of Airbus A320 aircraft.

Mr Joyce said the Qantas Group remained firmly committed to the Dreamliners for both Qantas International and Jetstar, and that it retained options and purchase rights for 50 B787s of either -8 or -9 variants available for delivery from 2016.

In an important milestone for the Jetstar B787 program, production of its first aircraft has just begun. With delivery of the aircraft not due until mid-2013, the airline is confident current technical issues will be resolved by Boeing.

The decision to amend the B787 order was reached at the end of 2012 and the agreement with Boeing has now been finalised.

The fleet changes announced today will have no material impact on the Group’s planned capital expenditure, which remains unchanged at $1.8 billion for FY13 and $1.9 billion for FY14.

Source: Qantas Airlines