A380 Deferral Opens Up Opportunities

Summary

• Qantas will not take delivery of 8 unfilled orders for the Airbus A380.
• Suitable candidates for the international fleet seem to be the Boeing 777-8 and Airbus A350-900ULR.
• Stretches of the seem to be unfit at first sight.

Last week the CEO of Qantas (OTCPK:QUBSF) said it does not want to take delivery of any of the 8 Airbus (OTCPK:EADSF) A380s that are still on order. The Australian carrier was one of the early customers and operators of the superjumbo and had ordered a total of 20 airframes. The airline had previously deferred orders in 2012 for the sake of cash conservation and repeated the same thing in 2014. The CEO now says that 12 A380 aircraft are enough and it does not want to take delivery of the remaining 8 unfilled orders.

AeroAnalysis previously marked these airframes to be unlikely to be delivered to Qantas. These airframes are not formally canceled by Qantas, but they will be sitting in Airbus's order books without the slightest chance of ever being delivered.

In 2000, the CEO at that time, deemed the Boeing (NYSE:BA) 777 unfit for the Qantas fleet. The Boeing 777 was too big for domestic operations. The firm ordered the Airbus A330 instead. For its international network the airline at that time preferred the Boeing 747-400, its ER variant and Airbus A380.

The current CEO said the following about the decision the firm made at that time:

It is great to be able to say I wish I could get in a time machine and go back to 2000 and [change] the fleet order [made by] not the last CEO, [but] the CEO before that…

The airline is currently in talks with Boeing and Airbus to see what the jet makers have to offer on the long term and probably to have some of their wishes incorporated in upcoming aircraft. This, however, does not mean that we will be seeing the Airbus A380 leave the Qantas fleet any time soon. The A380 fleet of the carrier has an average age of 7 years, with a spread of 3 years. So most likely the Airbus A380s will be around until at least 2025-2030.

In this article I will shortly introduce the aircraft that could strengthen the Qantas fleet in the future. After that I will dedicate some articles to have a more detailed look at each candidate aircraft.

Current international fleet

Before looking at the candidate aircraft it is important to have a look at the current international fleet of Qantas and upcoming introductions in the fleet.

Table 1: Current international fleet and orders for Qantas

One of the things that can be seen is that it is not necessarily the aircraft's seating capacity that makes it a suitable fleet member for the Qantas international fleet. Given Australia's geographical positioning the range of each aircraft is most important or at least far more important than it would be for other carriers.

Air New Zealand

One of the carriers that is in almost the exact same geographical position as Australia is New Zeland with its flag carrier Air New Zealand. The airline's international fleet consists of the Boeing 787-9, Boeing 777-200ER and Boeing 777-300ER. So whereas Qantas opted for the jumbos, Air New Zealand followed an industry-wide trend and opted for the Boeing 777-300ER. But it needs to be noted that the airline did not place its first order for the -200ER and 787-9 before August 2004 and August 2007 for the Boeing 777-300ER. Qantas by that time had already placed its order for the Boeing 747-400ER and at the time of that particular order the -300ER was not even launched yet.

Boeing 787

One suitable fleet member has turned out to be the Boeing 787-9, which already has been selected by Qantas to replace 5 of its aging Boeing 747-400 aircraft. In terms of capacity the Boeing 787-9 falls short of that of the Boeing 747-400. In typical 3-class configuration the aircraft carries 280 passengers, but Air New Zealand is known to have their Dreamliner aircraft configured with 302 seats, exceeding Boeing's standard counts.

In terms of range the OEM has specified a range of 7,635 nm for the 787-9 and 7,260 for the Boeing 747-400. It is, however, fair to point out that Qantas is operating its 747-400s with a lower seat count thereby increasing its range capability.

The Boeing 787-9 is likely to be configured with 250 seats. So, although the Boeing 787-9 can replace the Boeing 747-400(ER), it most definitely is not a one-on-one replacement.

I view the Boeing 787-9 as a good replacement for the -400 on thin routes that do not require the aircraft's full capacity. The Boeing 787-9 can also serve as a replacement of the Airbus A330-300, but would need a configuration optimized for operations between Australia and Asia.

The Boeing 787-8 and Boeing 787-10 are 2 other from the Dreamliner family, but I can be quite brief about those aircraft as candidate aircraft:

• The Boeing 787-8 lacks range as well as capacity
• The Boeing 787-10 has an appreciable seat count, but lacks the required range

Airbus A350

The Airbus A350 does have the range requirement that Qantas is likely looking for. The -900 is said to have a range of 8,100 nm, while its long-range variant has a range of 8,700 nm. The Airbus A350-1000 has a range of 7,990 nm. So these aircraft seem very suitable fleet members for Qantas. The bottleneck, however, could be the seating. The A350-900 and A350-1000 seat 325 and 366 passengers respectively. That figure is for a 2-class configuration. Qantas, however, does operate part of their international long haul fleet using a 4-class configuration. Obviously in 4-class configuration the seat count would come down for the Airbus A350.

Airbus might come up with a stretch of the -1000, which could carry up to 40-50 passengers more. This would likely push the range of the airframe down a bit, but have a more appreciable seat count. The consequence, however, is that its range is likely to come down a bit.

So whereas the Boeing 787 Dreamliner only has 1 aircraft that could strengthen the Qantas fleet, Airbus has 3 candidates. This makes it a more complete addition to the fleet, giving the airline some flexibility in selecting a particular type of the Airbus A350 for different routes.

Boeing 777X

The Boeing 777X family consists of 2 models and Boeing is currently pitching a third model to airlines around the globe. Whereas the Boeing 787-9 could be lacking in terms of capacity and the Boeing 787-10 is certainly lacking in range, the Boeing 777X is Boeing's aircraft family that is focused on long range operations with seat counts in excess of 350.

The Boeing 777-8 aims to carry up to 350 passengers over a distance of 8,700 nm. This combination of range and capacity is unmatched, even by the Airbus A350.

The second member of the 777X family is the Boeing 777-9, which has a range capability of 8,200 nm and can carry up to 406 passengers in 3-class layout. Currently Boeing reports their range and seat counts using a 2-class configuration seat count which would put the range at 7,600 and seat count at 400-425. So the Boeing 777-9 has a range comparable to that of the Boeing 787-9, but a significantly higher seat count.

Just like Airbus, Boeing is currently pitching a third model. This model which has no official name, but is dubbed '777-10X' for now and could carry up to 425-450 passengers in 3-class. This would make the airframe a direct replacement of the Airbus A380 on routes that see lower load factors.

Conclusion

One of the most important things in the decision making process for Qantas is an aircraft's ability to open up new city-pairs without a stop. Currently Dubai is used as an intermediate stop on routes to Europe and Los Angeles serves as an intermediate stop for flights to New York. A smaller airframe with better range capability would allow Qantas to operate flights to North America not limited to the West Coast. At the moment Qantas operates flights to Dallas Forth Worth, one of the longest flights in the world, via codeshare agreements with American Airlines (AAL) it serves destinations in North America. Operations to the European mainland could be served on a non-stop basis. Currently Qantas is connected to the European mainland by a single flight to London which makes an intermediate stop in Dubai and codeshare agreements with Emirates.

The 787-9 can be used on routes where lower capacity is required. It can easily operate flights to Asia and North America. The Airbus A350-900, its long range variant and the A350-1000 can operate on routes where a higher capacity is required. While on the busier routes that are slot constrained the Boeing 777X seems a perfect candidate. So all 3 aircraft families can be deployed on particular routes, but it is unlikely that Qantas will order them all.

For now, I think the 3 variants that have highest chances to strengthen the fleet are the Boeing 787-9, Airbus A350-900ULR and Boeing 777-8. I see very little chances for an order for the Airbus A350-1000, the Airbus A350-1100, Boeing 777-9 and Boeing 777-10X.

With an early selection made on which aircraft could be used to strengthen the Qantas international fleet, the next step is defining more detailed requirements and have a look at which aircraft would be better fitting. This will be done in the upcoming article(s).

Which aircraft do you think would suit the Qantas fleet? Let me know in the comment section.

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