Qantas squeezes Airbus and Boeing over aircraft for ultralong nonstop flights
Qantas sees demand from time-poor travellers willing to pay a premium to cut out stopovers
Sydney — Qantas has asked Airbus and Boeing for a better deal on aircraft capable of nonstop Sydney-London flights before deciding whether to place an order.
“We asked them to go back and relook at that, to sharpen their pencils, because there still was a gap there,” Qantas International CEO Tino La Spina told an investor briefing on Tuesday after Qantas outlined plans for capital spending to average A$2bn (R20.15bn) a year.
The Australian airline is considering launching the world’s longest nonstop flights because it sees demand for time-poor travellers willing to pay a premium to cut out stopovers.
Qantas is looking to replace its ageing fleet over the medium term and said it expects capacity growth in the domestic market to be near-flat in the current half.
On its nonstop Perth-London route, it is achieving a 30% fare premium in business and premium economy over one-stop flights from rivals, La Spina said.
“That surprised us, just how much people valued direct flying,” he said.
In addition to Sydney-London flights, the fleet of Airbus A350-1000 or Boeing 777-8 jets under consideration could also fly Melbourne-London and from Sydney and Melbourne to New York and Chicago, La Spina said.
Qantas is examining an initial order for 12 aircraft, a source familiar with the matter, who was not authorised to speak to the media, told Reuters.
La Spina and CEO Alan Joyce declined to be drawn on exact numbers during the briefing. “You have to have a big enough-sized fleet to make the economics work,” Joyce said.
Last week, after a London-Sydney test flight, he said Qantas would decide by the end of 2019 whether to proceed with plans for ultra-long haul flights and could place an order for aircraft early in 2020.
Citi analysts in July forecast that nonstop flights from Sydney to London and New York could add A$180m annually to the carrier’s profit before tax, which was A$1.3bn in the financial year ended June 30.