Qantas has ordered six more Boeing 787-9 Dreamliners as it heads towards another record underlying pre-tax profit of up to $A1.6 billion.
But the order will see the end of the airline’s long association with the “Queen of the Skies”, the Boeing 747 jumbo jet. The plane has been in the fleet since 1971.
The Flying Kangaroo announced the order Wednesday in a third-quarter trading update that predicted an underlying profit before tax of $A1.55 billion to $A1.6 billion.
WATCH: Qantas’ Boeing 787 Quokka inflight
The forecast comes as third-quarter revenue rose 7.5 percent to $A4.25 billion versus the same quarter last year.
The additional 787s are due to arrive between late 2019, when two will be delivered, and October, 2020. The additional planes will take Qantas International’s Dreamliner fleet to 14 by the end of that calendar year.
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This will allow for the accelerated retirement of its Boeing 747s, the last of which will now leave the fleet about October, 2020.
The airline currently has 10 747-400s and took the last delivery in 2003.
“This really is the end of one era and the start of another,” Qantas Group chief executive Alan Joyce said.
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“The jumbo has been the backbone of Qantas International for more than 40 years and we’ve flown almost every type that Boeing built. It’s fitting that its retirement is going to coincide with our centenary in 2020.”
The Qantas boss noted that each new version of the 747 had allowed Qantas to fly further and improve its offering to passengers.
“The Dreamliners are now doing the same thing.
“The 787 has better economics and a longer range, and its already opened up new routes like Perth to London. With a larger fleet of Dreamliners, we’ll be looking at destinations in the Americas, Asia, South Africa and Europe.
“By the end of 2020, we’ll have farewelled the 747, finished upgrading the cabins of our A380s, and welcomed our fourteenth 787. That’s a great proposition for our customers and creates some really exciting opportunities for our people.”
Cabin interiors on the new planes will be the same as its current Dreamliners with 236 seats versus 364 in the 747. The 787 has 42 business suites in 1-2-1 configuration, 28 premium economy seats in a 2-3-2 configuration and 166 economy seats in 3-3-3.
But the airline argues the reduced maintenance needs of the 787s combined with more efficient utilization and reduced payload restrictions on longer routes will mean the impact on Qantas International’s overall capacity will be negligible.
Joyce put the reduction in group capacity at about 3 percent compared with today.
He said new planes would see an increase in jobs, particularly for pilots where another 70 would be needed. Qantas also expects to invest in an additional 787 simulator to train pilots.
A key to the decision was the strong performance of the existing 787-9s in terms of relaibility and customer reaction, particularly on its new Perth-London route.
“We’ve been overwhelmed by the positive reaction we’ve had to it,” Joyce said of the new route. “Premium traffic is huge again, it’s going to make money from day one which we never have on new internatonal routes (and) which we’re really pleased about.”
Also relevant was the cost of retrofitting the 747s to improve the product if they were retained longer.
“So we made the choice of going for brand new aircraft and the business case works with even lower fuel than it is today,” Joyce said. “And certianly if fuel is higher, it really, really works.”
But Joyce also noted the airline’s strong performance had allowed it to invest in the Dreamliners.
He said the airline was on track to deliver another record full-year result despite a $A200 million increase in fuel bill for the 2018 financial year.
“We’re seeing solid results from each of our business units, which is a reflection of broadly positive trading conditions and the work we’ve done to strengthen the group.
“A large part of earnings momentum is driven by ongoing investment in customer experience.
“Improvements in aircraft interiors, rollout of free wi-fi, changes to our route network and lounge upgrades are why Qantas and Jetstar have a strong place in the market.
“We’ve also continued to broaden our earning streams with health insurance and financial services under Qantas loyalty.”
