PAUL PHELAN / CAIRNS
Manufacturers vie for major order as flag carrier increases domestic capacity
Qantas will consolidate its new domestic market dominance by adding 15 new narrowbody aircraft and re-jigging its fleet in a strategy to be partly funded by a A$300 million ($150 million) share sale announced on 18 October. It will also buy two more Bombardier Dash 8-300 turboprops.
The Airbus A320 is vying with the Boeing 737-800 for Qantas' 15 aircraft requirement, for delivery from January. Both manufacturers have been in negotiations with Qantas over the past three weeks, and a decision is expected this week. The deal will include options for at least 40 aircraft.
The new aircraft will be operated in an all-economy configuration of at least 165 seats, alongside around 25 existing Qantas 737-300/400s which will be reconfigured, to create a fleet of about 40 aircraft to meet low-cost challenges from Virgin Blue and any Ansett replacement.
The carrier has already expanded into regional centres formerly served by Ansett subsidiaries, and has put widebody capacity onto domestic trunk routes, further eroding the market base of an Ansett "Mk II".
Under the new strategy, most flights connecting Adelaide, Brisbane, Melbourne, Perth and Sydney will be operated by larger two-class Boeing 767s or Airbus A330s, while some will be flown by Boeing 747s that are surplus to needs after cutbacks in international services. These will include two-class 747 services between Perth and the East Coast and on long haul leisure routes.
"The domestic market has changed fundamentally and irrevocably over the past year and our new strategy will enable us to meet the increasing customer focus on flexibility," says Qantas chief executive Geoff Dixon. "Currently, we have about 85% of the domestic market because we have moved quickly," he says. "We will gradually discontinue these interim arrangements and services as Virgin Blue and other carriers grow."
A source associated with Ansett "Mk II" believes Qantas made an additional $200 million in the first two weeks after the Ansett collapse and that its ultimate market share target, which Dixon will not disclose, is 60%.
Meanwhile, Qantas sources say it is preparing to launch a low-cost domestic airline in New Zealand, using the resources of Impulse Airlines, currently wet-leased to the Australian carrier. This would release four more 737s into the fleet outlined by the new strategy.
Qantas-aligned Impulse is also tipped to take a higher profile in Australia, either adding further Boeing 717s or taking over some of the reconfigured Qantas fleet.
Source: Flight International
