My personal opinion is that OZ's financial problems are likely to initially arise from its complex wide body fleet structure which is quite ludicrous whilst thankfully the narrow body fleet revolves solely around the Airbus A320 family only.
As noted many times, OZ's financial problem arises from Kumho Group's ambitious M&A's all of which eventually failed.
OZ itself was still profitable in 2018 overall (although very slightly).
The current OZ wide body passenger fleet consists of:
15 A333s + 6 B763s + 8 A359s + 2 B744s + 9 B772ERs + 6 A380s totaling 46 aircraft along with 9 A351s being on order.
OZ has 25 A321NEOs on order starting from 2019 whilst the A351s deliveries commence from 2020-21.
To save on capital costs initially, as well as raise cash, I suggest the following:
a) The A351 deliveries should be deferred to commence from Q2-2021 to save on capital costs.
b) All deliveries of A321NEOs from 2020 onwards should be postponed till 2022 due to the same reason mentioned above.
c) 6 B763s + 2 B744s should be sold off by Q2-2020 latest to raise cash and taken out of the fleet mix to reduce complexity
d) A380s should be sold off starting from Q2-2020 onwards and out of service completely by end of IATA Summer 2021 season i.e. Oct 2021 to save on operating costs as well as raise cash. They are currently used exclusively on FRA, JFK and LAX services.
e) The 15 leased A333 fleet should be renegotiated and not have their contracts renewed beyond Summer 2023.
f) In addition, the existing 7 A320s + 2 A321-100s + 16 A321-200s should be sold off between 2022 and 2023 as each new A321NEO gets delivered.
g) The 9 B772ERs (avg age 13 years) should be sold from 2021 onwards and completed by Q4 2022. Each B772ER should be phased out as each A351 gets delivered in 2022. This will raise cash as well as take out another fleet type from the wide body mix.
In this manner from IATA W23 season, OZ's entire narrow and wide body fleet gets standardized in the below manner:
Narrow body - 25 A321NEOs exclusively seating 180 pax (12J + 168Y)
Wide body - A350 family exclusively (on order 30 firm of which 8 already delivered) + 10 options). To have a commercially viable operation on its long haul + regional route network as well as cater to local cargo market requirements, the break down of the OZ A350 firm order for 30 units should be 16 A359s + 14 A351s (MTOWs).
In this above proposed manner, the fleet mix gets standardized across 2 types of aircraft only versus 7 currently which is totally insane.
If the financial performance of the airline improves in 2022-23, the 10 A350s on option should be renegotiated in the below manner:
a) 5 A350s exchanged for 10 A321NEOs to boost its regional network especially on its highly popular Korea-China/Japan/Vietnam routes
b) The remaining 5 A350s should be converted to the A351-MTOW due to its superior economics on long haul and high demand regional Asian routes.
c) If the options get exercised, the fleet in 2025 would comprise of 35 A321NEOs + 19 A351MTOWs + 16 A359s totaling 70 aircraft.
a) There's a rumor that OZ doesn't even want them at all. Deferring them also makes sense.
b) Two A321neo's will be delivered from this year. One of them is already at the final assembly line.
c) Makes sense, and one of the 744 is already retiring this year. I don't know where it will go.
d) Who would buy them though? And again, with only 6 A380s, LAX(2X)/FRA/JFK(summer)/SYD(northern winter) works actually well with high load factors.
Keep in mind that S. Korea is heavily restricted by insufficient traffic rights, and OZ can't fly most of the longhaul routes except US for multiple frequencies.
e) I don't get the rationale. 333 is doing fine.
f) Makes sense unless these A321neos will be also given to Air Busan or Air Seoul.
g) Swapping from 772 to 351 will be significant upgauging. I'm afraid that will cause oversupply.
Also, 772/359 mix doesn't seem necessarily bad. The possible reason to retire 772 could be just more 359s.
Especially when the number of seats are very similar (301 vs 311).
* Using A359 for current A333 routes is possibly overkill in terms of capital cost.
* 14 A351s will cause oversupply and I actually don't see the need for A351 at all.
But I understand you are arguing on the basis of OZ selling off all the A380s. Even then, 9-10 will be enough.
The problem is that A351s will cause undersupply in the trunk routes (FRA/LAX/JFK in summer/SYD in northern winter).
I actually think OZ should increase the number of seats on its A380s for these markets.
a, b) Yes, OZ needs widebodies in those regional routes. GMP-HND/PEK/SHA routes are heavily restricted by traffic rights and A321neos will definitely cause undersupply.
While they can adopt A359 regional, they can also just keep using A333s. A351s may be too much especially with high MTOWs, and I don't know if bilaterals and the airports will allow A351s.