MEA
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Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 11:44 am

An interesting article appears in this January's Airline Business magazine with Australian Airlines looking at replacing the B767-300s with aircraft capable of providing more range.

Peter Gregg (Qantas CFO) also states that "An aircraft with longer legs might open up new routes, such as Lebanon and Greece, which have traditionally been strong markets for Australians".

The article also discusses Australian operating to Europe via China.

The only questions now are what aircraft type, A330, A350, B777 or B787 and how soon before they launch new routes as suggested above?
 
dl021
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 11:52 am

If they are seriously going to upgrade their capability they would seem to be a perfect fit for the new 7E7/787 (which designation are we going to use?) especially with the type routes described.

The A-330 and 777 would both be bigger than the 763, and inflict a different load factor requirement on the airline. If they want to carry more people then they are probably well served to look into the 772 or 773ER to meet this demand. The A-330 would suit medium distance routes for them, and do not seem to be in much use for ultra long haul.

Could you post a link to the article?
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 12:16 pm

Was there any mention of when the replacement announcement would be made? Currently Australian is basically a leisure airline, due to their current schedules.
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MEA
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 12:40 pm

I can't access the online version of the magazine, however, the url is http://www.airlinebusiness.com/.

There is no mention of a replacement schedule, however, it does mention that the B767-300s are from British Airways and the lease is reaching maturity. It is at this point in time that QF will replace the aircraft.

I guess a replacement schedule could be determined if anyone knows the Australian Airlines aircraft registration numbers & their lease expiration dates.
 
QANTAS077
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RE: Australian Airlines Fleet Replacement & More..

Mon Jan 10, 2005 12:42 pm

Australian isn't using any of the BA leased 767-300's, they are only deployed on domestic runs.

i'd think they'd go the A332 or the 7E7.
 
6thfreedom
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 12:49 pm

i think they will take QF's remaining B743's, which are currently allocated to MNL, CGK and BOM.

well, at least for the initial period.

in an all Y config, they could easily do 450 seats plus.



 
QANTAS077
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RE: Australian Airlines Fleet Replacement & More..

Mon Jan 10, 2005 12:54 pm

QF has no plans to dispose of the 743's or lease them to Australian. they are also used to NRT and SIN, AKL and will remain with QF for atleast another 5 years.

they have been refitted and most undergone life extension refit.
 
Lufthansa
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 1:04 pm

Guys it may seem like a longshot,

but, I wouldn't be surprised to see a few A340-300s employed here.
The reason being, although most of the routes the A330-200 would fit well, the A340-300 can cross the pacific. They should be able to get their hand on some used ones at cheaper prices than a 777, and, it would give the the ability to serve places like Canada as well. there are a lot of Australian skiers each winter who now go to Canada every year.

Also the A340 should be able to operate from the shorter runway at the Gold Coast, something the 747 cannot really do. This would allow direct flights from the Gold Coast to Japan. Of course most of this could be done with a A333 or a A332, but the Greece and Lebanon would be good markets for long range A340s flights. (although not high yeilding, lot of family traffic) Just a thought.

I really doubt the 777 has much of a chance here, although they may be able to get a good maintaince deal through Air NZ, particularly if they selected the RR engine.
 
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 1:14 pm

but, I wouldn't be surprised to see a few A340-300s Very highly unlikly.

The A330, B777 and B787 have a very good chance because either QF or NZ operate them or about to operate them. QF have a very good relationship with ANZES. If i remember correctly ANZES do about 30% of QFs maintaince.
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PER744
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 2:08 pm

I highly doubt you'd see transpacific on Australian Airlines. It would cannibalise the QF flights to LAX.
 
6thfreedom
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 2:36 pm

i agree. trans-pac for australian airlines is highly unlikely.
i also doubt that QF/AO will go out and purchase brand new aircraft for AO operations.

the cost of re-fitting the B743's [again!] would be significantly less than purchasing A330's or B777.
in short, i don't think AO's aircraft choice will allow for a new type to be introduced.

 
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ClassicLover
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 3:47 pm

Before rampant speculation, it did say traditional markets like Lebanon and Greece. Hasn't Qantas flown these destinations before and not found them profitable due to their cost structure?

Incidentally, anyone know the seat mile costs for Australian vs. Qantas?

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6thfreedom
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 4:18 pm

lebanon and greece provide significant VFR traffic outbound from Australia. SYD and MEL.

greece is a popular leisure destinationa laos [islands], and lebanon is an emerging outbound lesire destination.

prior ops {QF dropped athens in 1992} where 2 or 3 class.
an all economy op would make sense.

Furthermore, the flight to/from ATH would stop in BKK or even HKT, as this is popular for the Greece outbound market also.
 
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 5:19 pm

QF have given AO their unprofitable routes, just like QF have given JQ their domestic routes.
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MEA
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 6:01 pm

Here is a full copy of the article:

Australian Eyes Europe

Australian Airlines, the low-cost international arm of Qantas, is looking to extend it's reach beyond Asia when it starts replacing its Boeing 767 fleet.

Australian operates five all-economy 767-300s on Asian leisure routes where yields are too low for Qantas to make money. At the end of January Australian will replace Qantas on the Perth-Denpasar (Bali) route, adding yet another Asian destination to it's network.

Australian's 767s are on lease to Qantas from British Airways and Qantas has subleased them on to Australian. Peter Gregg, Qantas chief financial officer, says the BA leases are nearing maturity. When they do, Gregg predicts that Australian will look for a longer-range replacement aircraft. "The 767s limit Australian's ability to fly to certain markets," he says. "An aircraft with longer legs might open up new routes, such as Lebanon and Greece, which have traditionally been strong markets for Australians," Gregg predicts.

Australian could add destinations in that region in that region in the same way it has in Asia, by taking over routes that Qantas has withdrawn or plans to withdraw due to low yields. Gregg views these as more likely candidates for Australian's expansion than transpacific routes to North America, where Qantas operates profitably. Qantas has carefully avoided competition between the parent airline and Australian in any markets.

Mediterranean destinations would bring a shift in Australian's marketing strategy. So far it has focused on inbound leisure traffic, but routes to that region would appeal more to independent and group travel out of Australia.

Any expansion towards Europe opens up other route options. The most likely ones would be those European cities where Qantas has reduced or dropped service due to low yields. Australian might also operate fifth freedom flights to Europe via Asia. Now that Qantas has re-entered China, where it holds fifth freedom rights to much of Europe, the Qantas group is actively analysing whether some Australia-China-Europe routes might suit Australian Airlines better then Qantas.

The two-year-old low-cost airline's initial success points to a likelihood of it entering new markets in the near future. According to Gregg: "Australian bears close watching".

Source: Airline Business magazine, January 2005, Briefing Asia, page 31
 
bill142
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RE: Australian Airlines Fleet Replacement & More...

Mon Jan 10, 2005 10:16 pm

QF is looking at spending AU$3.5bn on new aircraft. Australian Airlines would most likley get aircraft that fit in with the QF mainline fleet and not some adhoc type that just dosn't fit.

I think we have to wait and see if QF goes 777 or A340 before any decision on which way Australian is going to go. Any 777 or A340 order could include some aircraft for Austrlian. So the fleet could be 772ER for AO and 773ER for QF. Does a fleet like that make sense?
 
whitehatter
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RE: Australian Airlines Fleet Replacement & More..

Tue Jan 11, 2005 6:20 am

Seems to me like they bungled the 767 leasing paragraph. What they probably meant was that if the 763RR aircraft are returned to BA then the 763GE aircraft would be required back at Qantas mainline. Which in itself is probably tied up with the A330 deliveries.

Price on the deal is going to be critical. AO is a low price airline, and capital costs hit ticket prices. So consider that adding another aircraft type to the mix isn't going to be efficient, but then again QF did it with Jetstar and the A320.

This one is wide open and price critical.
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RE: Australian Airlines Fleet Replacement & More...

Tue Jan 11, 2005 6:59 am

but then again QF did it with Jetstar and the A320 Yip, but QF and JQ had basically no option due to QF and JQ wanting to be different then DJ. If JQ went with the B738 then the JQ crew would demand the same pay as the QF mainline B738 crews.
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bill142
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RE: Australian Airlines Fleet Replacement & More...

Tue Jan 11, 2005 8:37 am

that raises the question, are AO crews being paid the same amount as QF 767 crews?

If they are the QF fleet planning could play a much bigger role in deciding which way AO goes with new aircraft.
 
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RE: Australian Airlines Fleet Replacement & More...

Tue Jan 11, 2005 10:49 am

All of AO's staff average less than QF's staff.

The cost structure of AO is going to be around 8 cents per ASM. On long haul flights, the extra cost of meals etc doesn't really add much to cost structure, and the cost of capital, labour etc weights more highly, as does fuel, which is one of the reasons SIA has a reasonable seat mile cost despite its extravegant service.

I suggest A340s not of LAX, but for the growing Canadian ski market. The obvious choice here is more A330-200s.... they're already in the fleet and they could do most of those routes. BUT,

if you were after USED aircraft, used A332s are going to be pretty hard to come buy, and they're certainly not going to come cheap. As for flights to europe... who in their right mind wants to travel Australian for that long anyway? Get real? Not when i can probably get just as gooder deal on MAS, Thai or JAL.

Perhaps what this is really aimed at is trying to place some pressure on Emirates, which would be largely sucking up much of the Lebanon market etc.

I really doubt QF would want to introduce another type, but as it was said earlier, this is gonna come down to the cost of capital.
 
TBCITDG
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RE: Australian Airlines Fleet Replacement & More...

Tue Jan 11, 2005 11:10 am

Rumors have been around for a while as to what new destinations AO would be flying to. For a while there was and still is talk in the corridors of QF that AO would replace QF on the flights to FRA. Hard to believe, but it has been said. Don't shoot the messenger!!
Personally I find it hard to believe seeing as people would rather prefer to fly on SQ,LH or any other carrier to FRA as opposed to flying a 'low-cost' airline for such a long flight. Plus I am sure those frequent flyers would not be too happy.
IMO I think that HNL would be an option for sure. And who knows, maybe even take the flight back to Vancouver just like QF did a few years back. Lebanon maybe? But there is just no competition between EK and AO.
What about another Indian destination? Or even AO taking over Mumbai?
 
6thfreedom
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RE: Australian Airlines Fleet Replacement & More...

Tue Jan 11, 2005 11:54 am

my money would be on AO operating Perth-India services. this can even be done now with a B763ER.

worth noting that AO entered Perth recently with 2pw Bali services. Now that AO have a perth base, who knows.

I doubt AO would operate India from East coast, given QF's investment on the sector ex-SYD, which is fed by AKL, MEL, and BNE among other ports.
 
miami1
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F

Tue Jan 11, 2005 12:09 pm

The leased 767s from BA are used by Qantas mainline not Australian Airlines. The are the 767ACE aircraft. ( those with the 8 DOOR exits) Australian run the 767-300 handed from Qantas. At the moment Australian Airlines cabin crew are not able to operate on sectors greater than 10hrs as per their EBA, im sure this will be altered in time to allow longer flight sectors. The agreement was put in place to partially protect the flying of Qantas Long Haul crews. At a recent Employee work place forum, Rodger Lindeman Qantas Airports Manager said that Australian AIrlines would not be doing the Hawaii flights, but then we know that Qantas Management would never reveal anything to employee's anyway. Im thinking that AO will eventually fly the old QF routes to Athens etc, the fact that they are a one class airline wont bother people coz when the price is right they dont care who they fly on.
 
DeltaWings
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RE: Australian Airlines Fleet Replacement & More...

Tue Jan 11, 2005 11:46 pm

Sounds like a perfect chance for the B7E8. But if they want an aircraft which is bigger, they can also get the B7E9.


~DeltaWings
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6thfreedom
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RE: Australian Airlines Fleet Replacement & More...

Thu Jan 13, 2005 8:02 am

see reply 21, and today's article in the local press:

QANTAS MAY BE ABOUT TO QUIT SOME ROUTES
AGE
13/01/05
BUSINESS
PAGE 2
Qantas subsidiary Australian Airlines is pushing for its flight attendants to fly longer routes, prompting speculation Qantas wants to cede more of its struggling international routes to the low-cost carrier it set up in 2002. There is speculation Qantas wants its subsidiary to take over services to Honolulu and India.
 
Rj111
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RE: Australian Airlines Fleet Replacement & More...

Thu Jan 13, 2005 8:10 am

but, I wouldn't be surprised to see a few A340-300s Very highly unlikly.

The A330, B777 and B787 have a very good chance because either QF or NZ operate them or about to operate them.

The A343 has 90% commonality with the A330. Regardless the A343 and 772ER are too much of a step up over the 763ER i'd imagine.
 
HAVIK747
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RE: Australian Airlines Fleet Replacement & More...

Thu Jan 13, 2005 11:03 am

it would be nice to see AO head to the USA even w/ 763s ...CNS-HNL-SFO or SYD-PPT-SFO
 
QANTAS077
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RE: Australian Airlines Fleet Replacement & More..

Thu Jan 13, 2005 11:39 am

you won't see AO in the US except at HNL, that's for sure that HNL will go to AO just when it will happen is the question, as for going to the mainland US, no chance considering how profitable it is already to QF
 
HAVIK747
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RE: Australian Airlines Fleet Replacement & More...

Fri Jan 14, 2005 6:52 am

Headline Qantas May Be About To Quit Some Routes
Date January 13th, 2005
Source The Age - Scott Rochford



Qantas May Be About To Quit Some Routes



QANTAS subsidiary Australian Airlines is pushing for its flight attendants to fly longer routes, prompting speculation Qantas wants to cede more of its struggling international routes to the low-cost carrier it set up in 2002.

Talks between Australian Airlines and the Flight Attendants Association over a new enterprise bargaining agreement have hit a snag, partly over the airline's plans to tear up an agreement that restricted its 300 flight attendants to destinations within a four-hour time zone of Cairns.

"That obviously means their intention is to fly their crews longer range, and if that's the case the crews have to be remunerated like other long haul cabin crews," said the FAAA's international division secretary, Michael Mijatov.

Australian's cabin crews get a maximum salary of $40,000 a year and the FAAA wants extra pay brackets.

The breakdown in talks has raised fears of strike action.

There is talk Australian Airlines would take over Qantas' service to Honolulu (20 hours behind Cairns) and introduce flights to India (41/2 hours behind). Mr Mijatov said the union would not oppose the removal of the four-hour time zone cap if the airline offered better pay rates.

However, Qantas head of human resources Kevin Brown said he found it "utterly puzzling" the FAAA would not agree to remove the time zone cap, opening up new growth opportunities and markets.

He said Australian's fleet could fly beyond the four-hour time zone limit, but he said the airline no immediate plans to expand its routes.

CommSec analyst Matt Crowe said Australian's expansion plans might have been reinvigorated by the recent success Jetstar has had in taking over Qantas' low-yielding domestic leisure oriented routes.

"They (Qantas) have got to look at addressing some of the areas where they do not make money and putting in low-cost services is one way of doing it," Mr Crowe said.

 
BA
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RE: Australian Airlines Fleet Replacement & More...

Sun Jan 16, 2005 5:47 am

Qantas currently code-shares on Gulf Air's daily BAH-BEY-BAH flight.

It be nice to see Australian service in Beirut.

SYD-BEY-ATH-BEY-SYD would be great. They could take advantage of Lebanon's open skies policy and see if they can sell the BEY-ATH-BEY segment.

Regards
"Generosity is giving more than you can, and pride is taking less than you need." - Khalil Gibran
 
PPVRA
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RE: Australian Airlines Fleet Replacement & More...

Sun Jan 16, 2005 12:55 pm

Any chance of seeing Embraers in Aussie and/or Kiwi colors? They would look so nice in QF and NZ colors... plus Embraer has an office in MEL, unfortunately not much has come out of there...

http://www.jetsite.com.br/fotos/EMBRAER_190_QANTAS.jpg

I think the main problem is because Brazilian-Australian relation is virtually inexistent. I hope to see QF and NZ at GRU some time in the near future, but we'll see.

Cheers,

PPVRA

[Edited 2005-01-16 04:58:01]
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bill142
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RE: Australian Airlines Fleet Replacement & More...

Sun Jan 16, 2005 6:20 pm

dosn't look overly different from the 738, except with a more 7e7ish nose to it.
 
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RE: Australian Airlines Fleet Replacement & More..

Tue Jan 18, 2005 2:03 pm

Don't think NZ will order the EMB as its a regional jet. NZ have no need for a regional jet. If NZ did then they would have ordered some by now.
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Unicorn
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RE: Australian Airlines Fleet Replacement & More...

Tue Jan 18, 2005 2:24 pm

Australian fleet replacement news

Australian has issued a quiet request for proposals to the leasing companies for additional A330-200s to be operated by Australian.

This was foreshadowed by Peter Gregg at a conference mid-2004, when he said that they would like longer legs and more passenger capacity for Australian, as it has been a suvccess in both inbound and outbound tourism.

The trouble is that A330-200s are in relatively short supply, and Qantas will have to pay higher lease rates for them.

The 7E7s are too far off in the future for Australian's requirements, and there is no way Qantas would purchase them initially for the leisure carrier. If QF did go for either A350 or 7E7, they would go into Qantas mainline service first.

Unicorn
 
6thfreedom
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RE: Australian Airlines Fleet Replacement & More...

Tue Jan 18, 2005 2:57 pm

BA, between u and i, don't be surprised if this does happen.

TG struggles to make BKK-ATH profitable year round, as the market is highly seasonal.

It has previously tried to, albeit unsuccessully, extend ATH to another point. Use to be FCO for a while, then GVA. But this decreased profitability further, as the Greek Govt imposes royalties and capacity restrictions.

A linked service with BEY could work well. Increase frequency to perhaps 4pw.

Furthermore, perhaps counter rotate, to offer 2 direct in each direction..

2 X BKK-BEY-ATH-BKK & 2 X BEY-ATH-BEY-BKK...
 
N1120A
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RE: Australian Airlines Fleet Replacement & More...

Tue Jan 18, 2005 10:31 pm

>The A343 has 90% commonality with the A330<

SMALL exceptions being pilot training and engines (though they do have similar engines on the 738s)

Obviously, the 7E7 or A350 is the ideal plane for an international LCC, seeing that their costs are so low and lots of upside. The 7E7 would be right sized for the replacement of the 763ER, especially since they seem to want more range, not necessarily more capacity. Also, in the AO configuration, the 7E8 would likely hold around 250 passengers.
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