Qantas buys A320s, plans new carriers

Qantas is to acquire at least 110 Airbus A320-family as it plans to set up a new premium airline in Asia and a low-cost carrier (LCC) in Japan. The Australian giant also announced that it is cutting about 1,000 jobs from its international business. The A320 decision marks Qantas’s first acquisition of the single-aisle type and includes 78 re-engined A320neo jetliners. The aircraft will be used to launch the still-unnamed premium carrier, which will serve Australia and Asia, as well as expanding services in the region for Qantas’s Jetstar low-cost unit. “We are delighted to be investing in Airbus’ fuel efficient A320 family, including the new A320neo, as part of Qantas’s international transformation plan and Jetstar’s pan-Asian expansion,” says Qantas Chief Executive Officer Alan Joyce. “The A320 Family’s outstanding operational efficiency and comfort, paired with its environmental credentials, make it the right choice.” At least 106 A320s will be ordered from Airbus, with another four to be purchased or leased, subject to availability, Qantas says. The decision also includes 194 purchase rights and options, “to support fleet renewal and growth for the next 10 to 15 years”, the airline says. The A320neo is a new engine option for the A320 Family to enter service in 2015. Alongside new-generation engines, it also incorporates ‘Sharklet’ wing-tip devices, delivering a total 15 percent reduction in fuel and CO2 emissions. Qantas has yet to choose between CFM International LEAP-X or Pratt & Whitney PurePower PW1000G engines for its A320neos. Qantas said it will establish a new Japanese LCC, called Jetstar Japan, in partnership with Japan Airlines (JAL) and Mitsubishi. The new carrier will commence domestic operations by the end of 2012, flying from Tokyo’s Narita airport and Osaka’s Kansai International, with other destinations under consideration including Sapporo, Fukuoka, and Okinawa. Jetstar Japan will later introduce short-haul international services to key Asian cities, Qantas says. The LCC will be launched with an initial fleet of three A320s, configured for 180 passengers in a single class, expanding to 24 aircraft within its first few years. Total capitalization commitment for the new airline is up to ¥12 billion (US$157 million). At the same time, the Australian airline has decided to defer deliveries of the last six of its twenty A380s by up to six years. These last aircraft will be delivered after mid-2013, as the airline retires its Boeing 747ERs. “As our flagship, the A380 is a fabulous aircraft and receives tremendous feedback from our customers. It will continue to lead our long-haul fleet,” Joyce says. “However, the review and restructure of our international network has led to the decision to defer six of the A380s we have in order.” “Our priority is to allocate capital to those businesses which provide the best return on investment,” he adds. “In this context we will continue to review our capital expenditure. This is an approach we have taken previously with the cancellation of Boeing 787 aircraft, and future 787 deliveries, like all aircraft orders, will be reviewed as required.” Joyce says the company will make about 1,000 jobs redundant “as a result of aircraft retirements, network changes and more-efficient practices”. The cuts will affect management positions, pilots, cabin crew and engineering. “There’s no doubt this is tough. But consistent with past practices, we expect the majority of these redundancies will be voluntary,” he says. “We will certainly be looking to minimise the number of compulsory redundancies, and also to preserve links with skilled personnel.” With its new strategy, Joyce says the company will safeguard the jobs of the majority of its 35,000 employees.