Qantas orders dozens of planes from Airbus, plans non-stop flights to New York, London

Bloomberg
Bloomberg

Summary

  • Qantas said the new ultra-long-haul, nonstop flights, dubbed Project Sunrise, would start from late 2025 and would at first connect Sydney with London and New York

Australia’s biggest airline, Qantas Airways Ltd., said it would order dozens of planes from European manufacturer Airbus SE, including new aircraft to fly nonstop between Australia and the U.S. and the U.K.

Qantas said the new ultra-long-haul, nonstop flights, dubbed Project Sunrise, would start from late 2025 and would at first connect Sydney with London and New York. The airline said the flights will build on the success of existing direct long-haul services, demand for which has increased following the Covid-19 pandemic.

“The board’s decision to approve what is the largest aircraft order in Australian aviation is a clear vote of confidence in the future of the Qantas Group," Qantas Chief Executive Alan Joyce said.

Like many airlines, Qantas had to cut staff and ground airplanes during the worst of the coronavirus pandemic, which snarled travel world-wide. Travel demand has snapped back in recent weeks, however, and Australian airports were swamped with travelers during the Easter holiday.

Qantas said it is ordering 12 Airbus A350-1000s for its Project Sunrise flights. Qantas said these planes will be able to connect Australia directly to anywhere in the world, such as nonstop flights from Australia’s east coast to London and New York. Previously, Qantas has flown nonstop from Australia’s east coast to cities such as Los Angeles and Dallas, and its service to London currently flies through Darwin.

In addition, the airline said it is ordering 40 A321XLRs and A220 aircraft for its domestic fleet, as well as 94 purchase-order options that will spread over at least a decade. Those planes will replace aging Boeing 737s and 717s, Qantas said.

Combined with an existing order for its budget airline Jetstar, Qantas said its total group order with Airbus now includes 299 planes, half of which are direct orders and half of which are purchase-right options.

Qantas also said Monday that domestic travel is returning to pre-Covid levels ahead of expectations. It said there is strong demand for international travel, but that some key markets aren’t yet open.

Underlying earnings before interest, tax and other items, or Ebitda, is expected to be between 450 million Australian dollars (US$318 million) and A$550 million in the second half of fiscal 2022, the airline said. However, Qantas said it expects to post a significant underlying loss before interest and tax for the full fiscal year, which includes the worst impacts of the Delta and Omicron Covid-19 variants.

Qantas said group domestic capacity is expected to be 105% of pre-Covid levels in the fourth quarter of fiscal 2022, rising to about 110%--revised down from 115%--for the first quarter of fiscal 2023. Group international capacity is expected to be just under 50% of pre-Covid levels by the end of the fiscal fourth quarter, rising to around 70% in the first quarter of fiscal 2023.

Qantas didn’t disclose the cost of the Airbus order, but said a significant discount from the standard price should be assumed.

This story has been published from a wire agency feed without modifications to the text

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