aussie_
Posts: 1600
Joined: Mon Dec 11, 2000 10:39 am

Qantas To Spend $1.5bn On New Planes?

Mon Jun 24, 2002 7:46 am

If anyone has subscription access to the Australian Financial review, there may be an article of interest:

Mon "Australian Financial Review"
Qantas ups stake in domestic war

Qantas Airways is moving to accelerate its fleet upgrade program with an additional investment of up to $1.5 billion in new planes, aimed at entrenching its dominant position in the domestic market and fending off discount rival Virgin Blue.

Rest of article locked.
 
aussie_
Posts: 1600
Joined: Mon Dec 11, 2000 10:39 am

RE: Qantas To Spend $1.5bn On New Planes?

Mon Jun 24, 2002 7:49 am

With Virgin Blue adding another 8 planes between now and the end of the year to a total of 28 (including 5 73Ws - 737-700s with winglets), there may be a bloodbath. I imagine both are trying to protect themselves against a potential 3rd entrant.
 
dalecary
Posts: 834
Joined: Tue Jan 18, 2000 10:28 am

RE: Qantas To Spend $1.5bn On New Planes?

Mon Jun 24, 2002 7:57 am

Lots of 738 and 717 options. Could be a smart move by QF to thwart once and for all a 3rd airline entering the Australian domestic scene. For all the ranting by many on this board, the pure economics would suggest to me that QF and DJ may have the domestic scene here to themselves. I fancy somehow DJ will be the preferred STAR feeder airline on Australian domestic routes and I seriously question the need for another full service carrier in this country, when most people regard flying as a mode of transport, where cost,frequency and destinations served have priority over in-flight service. In it's bare essentials it is just a glorified bus trip.
I, like Aussie would be most interested in reading the entire article.

Dale.
 
dalecary
Posts: 834
Joined: Tue Jan 18, 2000 10:28 am

RE: Qantas To Spend $1.5bn On New Planes?

Mon Jun 24, 2002 8:14 am

From Bloomberg. Looks like up to 15 more 738s and 3 A330s are on the cards. I think this should just about stop speculation about QF not taking up it's 330 orders.

Dale.

Top News
Mon, 24 Jun 2002, 09:06am EST

Qantas Talks With Boeing, Airbus About Possible
$862 Million Plane Orders
By Margreet Dietz and Kevin Foley

Sydney, June 24 (Bloomberg) -- Qantas Airways Ltd., which holds about 80
percent of the Australian market, is in talks with Boeing Co. and Airbus SAS
about buying additional planes for its domestic services, a spokesman said.

Sydney-based Qantas will hasten an upgrade program with additional investment
of as much as A$1.5 billion ($862 million) on planes to fend off rival Virgin Blue
Airlines Pty, the Australian Financial Review reported. Qantas spokesman
Michael Sharp wouldn't comment on the amount the airline may spend.

``We are talking to Boeing and Airbus'' about buying more planes, Sharp said.
``We are talking to Boeing about the possibility of getting some more 737-800's
and to Airbus about maybe some A330's'' and a decision is expected in a few
months.

Qantas said in October it had agreed to buy 15 new Boeing 737- 800 aircraft and
had also taken options to purchase as many as 60 more planes. Qantas and
Virgin Blue Airlines Pty have shared the domestic aviation market since Ansett,
Air New Zealand Ltd.'s Australian unit, collapsed in September. Plans to revive it
failed in February.

``The situation at the moment is that airlines around the world who had ordered
aircraft, no longer need those,'' Sharp said. ``So there are opportunities for us.''

The airline is in talks with Boeing and Airbus to buy as many as 15 Boeing
737-800 aircraft and as many as three A330 planes from Airbus for domestic
routes. Sharp declined to comment on the number of additional planes.

The move to fast-track a 10-year A$13 billion capital expenditure program will
defend the airline's more than 80 percent share of domestic flights, the
newspaper said.

Friday, Qantas said it wants to cut its management, finance, payroll and
frequent-flyer program costs by 15 percent by improving electronic systems to
compete against Virgin Blue.
 
BBD
Posts: 60
Joined: Fri Sep 21, 2001 2:12 pm

RE: Qantas To Spend $1.5bn On New Planes?

Mon Jun 24, 2002 8:19 am

Article from Australian Financial Review - 24/06/02

Qantas Airways is moving to accelerate its fleet upgrade program with an additional investment of up to $1.5 billion in new planes, aimed at entrenching its dominant position in the domestic market and fending off discount rival Virgin Blue.

The push to fast-track its 10-year, $13 billion capital expenditure program means the country's biggest carrier would aggressively defend its more than 80 per cent domestic market share instead of ceding some to Virgin Blue.

It is understood the airline has been prompted to consider the additional investment after receiving attractive offers from aircraft manufacturers Boeing and Airbus, and following the strengthening of the $A.

Industry sources said Qantas was negotiating with Boeing and Airbus to take up some of its options over new aircraft to buy up to 15 Boeing 737-800s and as many as three A330s for its domestic network.

Qantas plans to use the new planes to replace expensive wet-leased aircraft (leased with pilots and crews) that it has had to keep using since Ansett's collapse because the smaller Virgin - now jointly owned by Richard Branson and Patrick Corporation - has moved slower than expected to expand its fleet.

The move by Qantas puts pressure on the new board of Virgin Blue, which is preparing to decide on a multibillion-dollar investment to buy up to 40 new planes at its first meeting on July 3.

Air New Zealand is also understood to be considering acquiring new aircraft as part of a sale-and-leaseback deal last year.

It is expected Qantas would take delivery of as many as four of the new jets in the first half of the next calendar year and the rest over fiscal 2004, allowing it to retire some of its older Boeing 737s.

The new aircraft would add to 15 Boeing 737-800s Qantas has introduced and four A330s due for delivery between November and March 2003. It would give Qantas a fleet of up to 30 737-800s able to be configured to all-economy class to combat Virgin Blue and any other low-cost entrant that emerges.

A proposal on the new aircraft is expected to be put to the Qantas board in the next two months.

This would coincide with a decision on a possible investment to buy 25 per cent of Air New Zealand, a deal worth hundreds of millions of dollars, which could occur after New Zealand's July 27 election if agreement can be reached with Air NZ's majority owner, the NZ Government, and if regulators approve.

The investment in new aircraft would increase capital expenditure over the next two financial years, and could prompt Qantas to undertake a major capital raising.

The airline has indicated that it will consider a hybrid issue to raise as much as $1.5 billion for further expansion but it is also considering taking operating leases on some of the new planes and sale of its terminals to add financial flexibility.

The firming $A is believed to have cut the cost on paper of its 10-year capital expenditure program by as much as $1 billion because every US1¢ gain the $A makes cuts the cost of its fleet program by $132 million, as aircraft are bought in $US.
 
Marara
Posts: 634
Joined: Fri Oct 19, 2001 11:29 pm

RE: Qantas To Spend $1.5bn On New Planes?

Mon Jun 24, 2002 12:33 pm

If QF does buy into NZ does NZ have to leave Star?

If not do you guys think we might see NZ flying between major Australian cities alongside QF for the Star alliance (not competing with QF), while QF stays in OW?

Just a thought.
I like work: it fascinates me. I can sit and look at it for hours. Jerome K Jerome
 
wirraway
Posts: 1294
Joined: Sun Mar 25, 2001 4:32 am

RE: Qantas To Spend $1.5bn On New Planes?

Mon Jun 24, 2002 1:28 pm

AAP

Qantas to beat profit target
24jun02

QANTAS says it expects to beat its $550 million pre-tax profit target for this year by more than 10 per cent.

Chief executive officer Geoff Dixon said the improved result for Australia's largest airline was due to a range of factors.

They include a faster than expected recovery in the international aviation market, a solid domestic performance and improved overall productivity.

He said the main drivers of the improved productivity were the reduced overhead costs due to improved benefits of scale and a lower cost of scale from a significant increase in internet bookings.

Other benefits came from the dedicated CityFlyer shuttle service and the introduction of new, more efficient aircraft into the domestic fleet.

Qantas shares had lifted by more than 5.7 per cent or 26 cents to $4.60 at 12.15pm (AEST) with five million shares changing hands.

Mr Dixon said the results for the 2001/02 year would provide a solid foundation for 2002/03 when the company's major capital expenditure program would begin to impact.

For the years to 2005, Qantas is investing an average $2.5 billion each year on new aircraft, upgraded lounges and an improved product, including inflight entertainment and international sleeper beds.

Qantas has also recently committed $200 million over 10 years to build a new e-business platform aimed at cutting internal costs by 15 per cent.
 
wirraway
Posts: 1294
Joined: Sun Mar 25, 2001 4:32 am

RE: Qantas To Spend $1.5bn On New Planes?

Mon Jun 24, 2002 2:02 pm

Dalecary

I bet all this positive news from Qantas to-day will not make
SIA happy campers, they just might have left their run too late
if they were indeed thinking of starting a 3rd airline in Aussie,
and tend to agree with you that they and the rest of Star
Alliance will cut a deal with Virgin Blue. The next big announcement
should be the aircraft order for VB after the first joint meeting of
the new board on July 3rd consisting of 3 each from VB and Patrick
Corp.

Wirraway