Qantas switches domestic fleet to Airbus in blow to Boeing

Australia's national airline is the latest to join the pandemic-inspired race for efficient medium-haul jets
Qantas switches domestic fleet to Airbus in blow to Boeing

Qantas chief executive Alan Joyce said he was not concerned that his airline would be overly reliant on Airbus.

Qantas Airways has selected Airbus as the preferred supplier to replace its domestic fleet, switching from Boeing in a major win for the European planemaker that also triggered an upheaval in engine supplies.

The Australian national airline, led by Dubliner Alan Joyce, will buy 40 Airbus jets with a list price of at least $4.6bn (€4.06bn) before discounts, with options to buy an additional 94 aircraft over more than a decade. The planes replace Qantas’s ageing fleet of almost 100 Boeing 737s and 717s — some of them about 20 years old — that still serve as the airline’s domestic workhorses.

Qantas is the latest airline to join a growing race for efficient medium-haul jets as carriers look past the pandemic to lower fuel costs and help emissions targets. The agreement is subject to board approval, expected by June 2022 after negotiations with pilots.

Deliveries would start in mid-2023 and continue over 10 years to replace an ageing fleet of 75 Boeing 737s and 20 717s. Mr Joyce said:

This is a clear sign of our confidence in the future and we've locked in pricing ahead of what is likely to be a big uptick in demand for next-generation narrowbody aircraft.

The win caps a successful week for Airbus after Singapore Airlines agreed to launch the A350 freighter and the planemaker looks poised to seize a narrowbody order from KLM in what could become the second defection in 24 hours.

Major blow for Boeing

For Boeing, the loss of the coveted Qantas contract is a further blow to its 737 MAX. It interrupts a strong run of sales since the jet was cleared for flight late last year following a safety ban and means a further loss of narrowbody market share to Airbus.

Qantas has operated Boeing jets since 1959 and was once the world's only airline with an all-747 fleet. The US planemaker will now supply only its long-haul 787 Dreamliners.

Mr Joyce said he was not concerned that his airline would be overly reliant on Airbus:

I'm sure that Boeing will be very, very aggressive to maintain their relationship with us, which is a big one with the 787s, when other competitions come up.

He said the flexibility to combine the Qantas narrowbody order with one already placed by low-cost arm Jetstar for more than 100 A320neos was a key attraction of the Airbus deal.

Qantas is separately looking at A350 widebodies capable of the world's longest commercial flights from Sydney to London.

In a statement, Boeing said it was “disappointed” at the result, but respected Qantas’s decision.

Bloomberg and Reuters

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