Qantas’ Alan Joyce confirms intention to replace airline’s Boeing 737 fleet by end of 2020


“The replacements are not needed until the end of the next decade, the 2020s, but given how fast aircraft are filling up you need to make a decision, we think, in 2020,” Mr Joyce said.

The push to replace the domestic fleet comes as Qantas has been urged by the airline’s engineers’ union to ground 33 of its Boeing 737 NGs after cracks were found in three of the jets’ “pickle forks”, which attach the wings to the body.

The cracks – which Qantas said do not immediately compromise safety – are a worldwide issue affecting Boeing’s popular 737 NG model aircraft.

Airbus is struggling to get short-haul aircraft out of its European factories fast enough to meet delivery schedules, while Boeing has slowed output of its best-selling 737 MAX during a worldwide grounding of that aircraft now stretched into almost its eight-month following two fatal crashes.

Mr Joyce said the choice would be between the Airbus’ A320 and A321, and Boeing’s 737 MAX and its proposed “New Midsize Aircraft” (NMA) aircraft, also referred to as the 797.

The NMA is a proposed twin-aisle aircraft that would sit up to about 250 passengers (compared with 174 on Qantas’ 737s), which Mr Joyce said he hoped Boeing will put into production.

“We’re looking at the second-largest city pair in the world, Melbourne-Sydney … and there’s no more slots at [Sydney’s] Kingsford Smith at peak times,” Mr Joyce said.

“That market will grow as the two cities are growing … [so] at some stage you want to have bigger aircraft.”

Credit Suisse aviation analyst Paul Butler said the domestic fleet replacement was a “very significant” decision, with an order price tag of more than $5 billion.

“You’re making decisions with very long-term impacts, so they’ll be considering how they see their business developing,” Mr Butler said.

“The risks are committing yourself to a course of action that doesn’t allow you flexibility to respond to how the demand for air travel evolves.”

For example, some observers say that Qantas made a mistake in 2006 when it ordered the Airbus A380 super jumbos, which have since fallen out of favour with airlines as they move towards point-to-point travel using smaller aircraft.

Qantas only ever took delivery of 12 A380s out of an order of 20, and Airbus will stop building the jet in 2021.

Qantas is also looking to replace its 21 Boeing 717s and 17 Folker F100s used on regional routes, which Mr Joyce said could form part of the one order to induce the best deal possible out of either Boeing or Airbus.

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Airbus has entered a joint venture with Bombardier to manufacturer its 130-160-seat C Series, now rebranded the A220, while Boeing is trying to enter a joint venture with Embraer, which also makes smaller aircraft.

Qantas will be able to renew its fleet over the next 10 years without its annual capital expenditure going above $2 billion, Mr Joyce said, however buying long-haul jets for its so-called “Sunrise” flights would come on top of that.

The Qantas group already has 99 Airbus A321neo aircraft on order for its low-cost subsidiary Jetstar, with the first 18 to be delivered between 2020 and 2022.

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