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Is Qantas Likely To Order The MAX?  
User currently offlinevaus77w From Australia, joined Aug 2011, 143 posts, RR: 0
Posted (1 year 11 months 3 weeks 7 hours ago) and read 9111 times:

I've been wondering lately as to why they haven't placed an order yet for their domestic fleet. I know they are being cautious with their capital expenditure lately. It's fair they are cutting back fleet renewal for the loss-making international arm but shouldn't the profitability of the domestic arm warrant some investment in next-gen narrow-body aircraft, especially now that DJ has some on order? They were pretty quick to order NEOs for JQ.

48 replies: All unread, showing first 25:
 
User currently offlinesmi0006 From Australia, joined Jan 2008, 1533 posts, RR: 0
Reply 1, posted (1 year 11 months 3 weeks 6 hours ago) and read 9026 times:

They have a number of new 738s headed their way still, many are still very very new. Not to mention alot of wideboady capacity coming in in the form of A330s and 787s eventually. I think over time we will see QF shift to a greater percentage of widebody flying domestically, thus with so many new 738s they are far far from being in a rush. Perhaps when they start posting substantial profits again (I don't think this will be too far away), then we will see some more domestic orders.

User currently offlineFCAFLYBOY From United Kingdom, joined Nov 2006, 596 posts, RR: 0
Reply 2, posted (1 year 11 months 3 weeks 5 hours ago) and read 8902 times:

Aren't QF skint? I would think they will be trying to line their pockets a little more and getttinginto the black before ordering anymore a/c.

User currently offlineqf002 From Australia, joined Jul 2011, 2987 posts, RR: 2
Reply 3, posted (1 year 11 months 3 weeks 5 hours ago) and read 8836 times:

QF's oldest 738's are only just on a decade old, and they have taken a pretty steady stream of new planes since then. I'd expect them to be looking for either NEO's or MAX's for delivery from 2020-21, so there's no need to rush into any deals before they know what the market will look like down the track.

I agree they will probably get the MAX, but the NEO has to be in contention given that the QF Group will be operating hundreds of A320's by the end of the decade.

Quoting FCAFLYBOY (Reply 2):
Aren't QF skint? I would think they will be trying to line their pockets a little more and getttinginto the black before ordering anymore a/c.

QF has close to $4bn in cash, and their short haul divisions are performing well. Long haul is losing a lot of money, but domestic, Jetstar and the Frequent Flyer business are very profitable.

Capital spending has only been cut back internationally -- they are taking planes domestically (ie another A332 this month, and the 737's that keep arriving).


User currently offlinezeke From Hong Kong, joined Dec 2006, 9109 posts, RR: 75
Reply 4, posted (1 year 11 months 3 weeks 3 hours ago) and read 8562 times:

Quoting qf002 (Reply 3):

QF has close to $4bn in cash, and their short haul divisions are performing well. Long haul is losing a lot of money, but domestic, Jetstar and the Frequent Flyer business are very profitable

Not sure about the long haul performance comment, I was of the understanding that the return on investment was low for the amount of capital deployed, I.e., if they invested the cash they would earn more in interest.



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offlineVC10er From United States of America, joined Feb 2007, 2899 posts, RR: 9
Reply 5, posted (1 year 11 months 3 weeks 3 hours ago) and read 8519 times:
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Perhaps this question is for another thread or already answered in one..but I must admit I haven't followed Qantas' woes, why are they doing so poorly? Everyone says their on board experience is great?


The world is missing love, let's use our flights to spread it!
User currently offlineStickShaker From Australia, joined Sep 2004, 756 posts, RR: 5
Reply 6, posted (1 year 11 months 3 weeks 3 hours ago) and read 8456 times:

QF tend to keep their aircraft for much longer than DJ - slightly different business model than DJ who turn their aircraft over much sooner. They also placed a large order for 738's a couple of years ago (not sure how many are left outstanding) and may not see a need to add more for a while.


Regards,
StickShaker


User currently offlinetayser From Australia, joined Mar 2008, 1131 posts, RR: 0
Reply 7, posted (1 year 11 months 3 weeks 2 hours ago) and read 8355 times:

Quoting VC10er (Reply 5):
Perhaps this question is for another thread or already answered in one..but I must admit I haven't followed Qantas' woes, why are they doing so poorly? Everyone says their on board experience is great?

how long is a piece of string?


User currently offlinem1m2 From Canada, joined Dec 2011, 91 posts, RR: 0
Reply 8, posted (1 year 11 months 2 weeks 6 days 19 hours ago) and read 6952 times:

Depends how long you cut it!

User currently offlinericknroll From Afghanistan, joined Jan 2012, 830 posts, RR: 0
Reply 9, posted (1 year 11 months 2 weeks 6 days 18 hours ago) and read 6719 times:

Quoting StickShaker (Reply 6):
QF tend to keep their aircraft for much longer than DJ - slightly different business model than DJ who turn their aircraft over much sooner. They also placed a large order for 738's a couple of years ago (not sure how many are left outstanding) and may not see a need to add more for a while.

Virgin is flying 737 with the sky interior, very nice. Qantas is still flying pre NG 737. Helps make the choice which airline to fly easier.


User currently offlinezkokq From Australia, joined Mar 2012, 477 posts, RR: 0
Reply 10, posted (1 year 11 months 2 weeks 6 days 18 hours ago) and read 6633 times:

Quoting ricknroll (Reply 9):

Virgin is flying 737 with the sky interior, very nice. Qantas is still flying pre NG 737. Helps make the choice which airline to fly easier.

Not really. I prefer the experience I get with QF. Pay the extra money and its well worth it. Especially when its a flight like BNE - SYD


User currently offlinetravelhound From Australia, joined May 2008, 938 posts, RR: 12
Reply 11, posted (1 year 11 months 2 weeks 6 days 18 hours ago) and read 6574 times:

Flew QF twice last month. In both instances the 737's had the sky interior.

User currently offlineRyanairGuru From Australia, joined Oct 2006, 5586 posts, RR: 5
Reply 12, posted (1 year 11 months 2 weeks 6 days 18 hours ago) and read 6566 times:

Quoting ricknroll (Reply 9):
Virgin is flying 737 with the sky interior, very nice

QF also have Sky Interior 737s. Someone correct me if I'm wrong but I'm 90% sure that QF have more Skys than DJ does.

Beyond the Sky Interior, there are also "normal" 73Hs which have the new interior: obviously not the new overhead bins and LED lights, but they have the new seats in both cabins including AVOD.

Quoting ricknroll (Reply 9):
Qantas is still flying pre NG 737

The -400s are on their way out, and to be honest they are absolutely fine for 1 hour flights - there is no divider between J and Y which has always struck me as strange, but in Y they are basically exactly the same as the 738s (old interior). Yes they're a bit tattier, but then I've also seen some pretty crappy DJ interiors on the oldest frames



Worked Hard, Flew Right
User currently offlineBill142 From Australia, joined Aug 2004, 8451 posts, RR: 8
Reply 13, posted (1 year 11 months 2 weeks 6 days 17 hours ago) and read 6403 times:

Quoting ricknroll (Reply 9):
Virgin is flying 737 with the sky interior, very nice. Qantas is still flying pre NG 737. Helps make the choice which airline to fly easier.

Which are being replaced by 738s. Both have BSI 737s and Qantas are upgrading their early 738s to have a BSI like interior.

Qantas 1

Virgin 0

Quoting RyanairGuru (Reply 12):
The -400s are on their way out, and to be honest they are absolutely fine for 1 hour flights - there is no divider between J and Y which has always struck me as strange,

That's because J is convertible on the 734


User currently offlineEK413 From Australia, joined Nov 2003, 4921 posts, RR: 4
Reply 14, posted (1 year 11 months 2 weeks 6 days 17 hours ago) and read 6231 times:

Quoting ricknroll (Reply 9):
Virgin is flying 737 with the sky interior, very nice. Qantas is still flying pre NG 737. Helps make the choice which airline to fly easier.

Yes & the winner is... You're the reason I fly Qantas...

QF continue to accept delivery of new B738's with the Sky interior and more to come... The earlier deliveries will have the interiors upgraded...

EK413



Good evening, ladies and gentlemen. We are tonight’s entertainment!
User currently offlinevaus77w From Australia, joined Aug 2011, 143 posts, RR: 0
Reply 15, posted (1 year 11 months 2 weeks 6 days 17 hours ago) and read 6205 times:

Quoting qf002 (Reply 3):

QF's oldest 738's are only just on a decade old, and they have taken a pretty steady stream of new planes since then. I'd expect them to be looking for either NEO's or MAX's for delivery from 2020-21, so there's no need to rush into any deals before they know what the market will look like down the track.

Yeah that's a good point, I guess they are pretty well positioned in terms of fleet renewal and capacity growth with their current order of 738s and A332s.

Quoting StickShaker (Reply 6):

QF tend to keep their aircraft for much longer than DJ - slightly different business model than DJ who turn their aircraft over much sooner. They also placed a large order for 738's a couple of years ago (not sure how many are left outstanding) and may not see a need to add more for a while.

Agree, although as fuel prices go up, it will come to a time where they will need more efficient planes.

Could it be possible that they are trying to skip a generation and replace 737s with the next generation of narrowbody aircraft coming post MAX/NEO?


User currently offlineRyanairGuru From Australia, joined Oct 2006, 5586 posts, RR: 5
Reply 16, posted (1 year 11 months 2 weeks 6 days 17 hours ago) and read 6197 times:

Quoting Bill142 (Reply 13):
That's because J is convertible on the 734

I realise that, I've sat in "J" before when flying Y. But BA, LH etc have a movable curtain which can be positioned depending on how many rows are being sold as J



Worked Hard, Flew Right
User currently offlineEK413 From Australia, joined Nov 2003, 4921 posts, RR: 4
Reply 17, posted (1 year 11 months 2 weeks 6 days 17 hours ago) and read 6141 times:

Quoting vaus77w (Reply 15):
Could it be possible that they are trying to skip a generation and replace 737s with the next generation of narrowbody aircraft coming post MAX/NEO?

If QF skip a generation wouldn't that place them in a position their currently in with the aged B763 & B744 fleet...? (I'm aware the B744 fleet is being phased out)
EK413

[Edited 2012-10-06 17:39:20]


Good evening, ladies and gentlemen. We are tonight’s entertainment!
User currently offlineqf002 From Australia, joined Jul 2011, 2987 posts, RR: 2
Reply 18, posted (1 year 11 months 2 weeks 6 days 16 hours ago) and read 6046 times:

Quoting VC10er (Reply 5):

Their costs are extremely high when compared to Asian and Middle Eastern competition. It's very tricky for QF to cut costs without seriously degrading their product quality (as many other legacy airlines have done) because of the restrictions of our local operating environment (high wages, geographical issolation, taxes etc). They would love to move a large chunk of their operating base offshore to reduce costs, but the QF Sales Act restricts them in that regard as well.

So, in order to compete internationally on a fare basis with overseas airlines, QF has significantly lower profit margins and yields across the board. The high level of competition internationally from Australia puts further pressure on margins/yields to the point that both simply cease to exist on some routes, many of which appear to be retained in order to sustain corporate traffic from Australia, which is probably where QF does make money internationally.

Domestically they are doing well, because the market is willing to pay a fare premium over low cost carriers/Virgin for the higher standard of service. It's also a fairer playing field because all the carriers flying domestically are subject to similarly high base operating costs, so QF has a better chance of competing.

Quoting RyanairGuru (Reply 16):
I realise that, I've sat in "J" before when flying Y. But BA, LH etc have a movable curtain which can be positioned depending on how many rows are being sold as J

I can't think of any airline with a curtain on a 737, so perhaps it is something specifically to do with the aircraft rather than QF? Plenty of carriers do have them, as you say, but they all seem to fly A320's.


User currently offlineRyanairGuru From Australia, joined Oct 2006, 5586 posts, RR: 5
Reply 19, posted (1 year 11 months 2 weeks 6 days 16 hours ago) and read 6047 times:

Quoting qf002 (Reply 18):
I can't think of any airline with a curtain on a 737, so perhaps it is something specifically to do with the aircraft rather than QF?

BA and KLM immediately spring to mind



Worked Hard, Flew Right
User currently offlinethegeek From Australia, joined Nov 2007, 2638 posts, RR: 0
Reply 20, posted (1 year 11 months 2 weeks 6 days 16 hours ago) and read 5844 times:

Quoting VC10er (Reply 5):
Perhaps this question is for another thread or already answered in one..but I must admit I haven't followed Qantas' woes, why are they doing so poorly?

An excellent question. Times are tough, but it wasn't that long ago that they made nearly $1bn in a year. I think two more competitors on LAX routes have not been at all helpful to them. They've invested some money on unprofitable ventures in Asia. Seems that they have significant restructuring costs.

I hope someone can add something to those points?


User currently offlineEK413 From Australia, joined Nov 2003, 4921 posts, RR: 4
Reply 21, posted (1 year 11 months 2 weeks 6 days 15 hours ago) and read 5744 times:

Quoting thegeek (Reply 20):
I hope someone can add something to those points?

With increased competition on the Kangaroo route SQ, TG, CZ, and then you have the middle eastern carriers EK, EY, QR... The introduction of low cost international carriers didn't help QFs healthy profit margins...

& QF didn't order the B77W 

EK413



Good evening, ladies and gentlemen. We are tonight’s entertainment!
User currently offlinevaus77w From Australia, joined Aug 2011, 143 posts, RR: 0
Reply 22, posted (1 year 11 months 2 weeks 6 days 15 hours ago) and read 5715 times:

Quoting EK413 (Reply 17):
If QF skip a generation wouldn't that place them in a position their currently in with the aged B763 & B744 fleet...? (I'm aware the B744 fleet is being phased out)

It would and the longer they take to order, the slots they can get will be later and later.

I think it's a bit unfortunate that JQ seems to get all the new highly efficient planes while QF is left with an ageing fleet, I can understand why they do it (better ROI) but it's still a shame IMO.


User currently offlineRyanairGuru From Australia, joined Oct 2006, 5586 posts, RR: 5
Reply 23, posted (1 year 11 months 2 weeks 6 days 14 hours ago) and read 5543 times:

Quoting thegeek (Reply 20):
I think two more competitors on LAX routes have not been at all helpful to them

All 4 carriers have said that Aus-US is profitable, the real drain has been the kangaroo route. To oversimplify things compares prices from SYD to LHR and LAX, and then consider that LAX is only 2/3 the distance of LHR.

Also they've failed to expand affectively into Asia which means that other carriers (especially SQ and CX, and increasingly CZ) are wiping the floor with them in that market



Worked Hard, Flew Right
User currently offlineEK413 From Australia, joined Nov 2003, 4921 posts, RR: 4
Reply 24, posted (1 year 11 months 2 weeks 6 days 14 hours ago) and read 5452 times:

Quoting RyanairGuru (Reply 23):
Also they've failed to expand affectively into Asia which means that other carriers (especially SQ and CX, and increasingly CZ) are wiping the floor with them in that market

& not to mention CX is a Oneworld partner not a competitor... Unfortunate to see the relationship between the 2 sour...

Quoting vaus77w (Reply 22):
I think it's a bit unfortunate that JQ seems to get all the new highly efficient planes while QF is left with an ageing fleet, I can understand why they do it (better ROI) but it's still a shame IMO.

Even though JQ continue to expand within OZ and notably in Asia the domestic arm of QF continue to thrive with next generation B737 joining the already strong fleet of 60+ aircraft... Fingers are crossed 2013 will bring with it the transition of the JQ A330 to mainline QF...

EK413



Good evening, ladies and gentlemen. We are tonight’s entertainment!
25 gigneil : They ordered a billion planes and then had to cancel them. I don't see anything happening. NS
26 lasairlinerenth : Just out of curiosity -- and this is not intended to derail the thread -- but what are Qantas's most profitable international routes? Roughly speaking
27 qf002 : It must just be QF then -- I can't imagine why though. Thinking further on this question again, QF isn't a particularly proactive company. They didn'
28 smi0006 : The 738s have curtains both the BSI and the older ones, they have one that comes down from the lockers and then one that is drawn across the aisles t
29 EK413 : Did I miss something...? From my understanding the firm order for 35 B787s was cancelled with 50+ options available from 2016 when QF is planned to r
30 qf002 : QF had 115 aircraft on order at one stage in 2007/8 (65 firm with 50 options/rights), and they now are only committed to taking 15. They now have a t
31 EK413 : I hope the B787 options materialize into firm orders otherwise I can't see how a bunch of A332s is going to solve the problem... QF will have approxi
32 pugsley : Didn't QF order something like 115 A320/A320NEO one or two years for the JQ group, of which 7or8 were for JQ Japan, 30 ish for JQ Australia and a hand
33 anstar : Agreed - longer term it makes more sense to have a single narrow body fleet between all their carriers IMHO.
34 TruemanQLD : I would expect more to be allocated to JQ Japan and JQ HKG, maybe 20 each? Keeping in mind these frames won't be delivered for a while so by that tim
35 EK413 : I hope the A320s end up at QF mainline but wasn't the main reason JQ operate the A320s due to QF B737 pilots being on a higher pay rate...? EK413
36 vaus77w : Definitely makes sense. Does anyone know if they have any options/purchase rights on the NEO in addition to the 115-odd firm? I looked on the QF/JQ w
37 EK413 : Fleet orders: Jetstar has ordered 15 Boeing 787 Dreamliners, which are due to be delivered from mid-2013. These new-generation aircraft include featu
38 RyanairGuru : As others have said it is almost certainly LAX, but JNB is said to do very well as well. Also one most people forget: HNL. Fares are normally the sam
39 lasairlinerenth : Thanks for all the information and the good wishes! I'm going to try to do a trip report -- it will be my first for the site. Being this far out (6 w
40 Post contains links flood : - The purchase of between 28 and 32 current-generation A320 aircraft. - The purchase of 78 new A320neo aircraft with 194 rights and options for furth
41 vaus77w : Thanks for the info. Wow that's quite a lot of options/rights. Maybe QF does have plans to rollover the 737 fleet to the A320 in the future.
42 EK413 : This still raises my original question... I'm sure someone can answer it... EK413[Edited 2012-10-07 16:49:05]
43 vaus77w : My understanding is that QF chose a different type to the 737 for JQ so it would be a separate labour contract for the pilots, with lower pay and con
44 StickShaker : Its been a combination of poor fleet planning and a complacent mentality in terms of moving from hub to hub accross to P2P. The lack of any 300 seat
45 EK413 : The lower labour costs is exactly what I speculated... I'm sure QF will find a way around it considering the options available... EK413
46 vaus77w : Agreed, the smallest plane they can currently fly to Europe, South America and South Africa is a 744. Looking back, the 343 probably would have been
47 EK413 : I've never understood the decision making within the QF board... Ok, the B744 fleet is probably paid for considering the billion dollar profits and c
48 thegeek : My understanding is that JQ could have used the 737 without invoking contractual problems in theory, but to prevent a possible grounds for a dispute
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