This situation is probably a consequence of QANTAS downsizing its international operations in the 2009-2012 period and not bringing the 787 into its fleet earlier.
From where I sit a part of the QANTAS strategy should have revolved around growing its market. We haven't seen much happen with Jetstar over the last five years and QANTAS International, even though being profitable for a good two years is still flying the same jet mix it was flying five years earlier.
Considering the contraction of the QANTAS business that took place in the 2010-2012 period there should be quite a few established markets where QANTAS can grow its presence.
Obviously and as the article suggests the question revolves how will QANTAS fund this growth?
With the A380’s coming off lease/finance in the 2019-2023 year period, a considerable amount of CAPEX will be freed up for future jet purchases. We know the 787-9, 777X, A350 and 787-10 are on the shopping list. The problem revolves around deliveries and the CAPEX required to fund these deliveries.
At a lease rate of $1m per month or CAPEX of $135m for a 787-9, ten of these aircraft delivered over a two year period would require CAPEX of $700m per year. If we consider QANTAS have already stated the 787-10 will be the prime aircraft to replace the A330-300 starting in 2021, we have additional CAPEX of $800m per annum considering a purchase price of $155 per unit…..and we haven’t considered the 777X replacing the A380 as yet. Bringing either the 777X or A350 into the fleet will require the purchase of a considerable amount of spares and the development of new maintenance facilities.
Typically QANTAs have leased 40-60% of their fleet. I’d suggest QANTAS are looking at financing their future fleets to reduce costs and give them more flexibility in how these aircraft are operated.