Qantas acquires 110 Airbus A320s, cuts jobs, launches new LCC

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Qantas Group will make a swathe of changes across the company, including the acquisition of 110 Airbus A320 aircraft - of which 78 are A320neos - thousands of job cuts at its international operation, the creation of an as-yet unnamed premium Asian airline, and a new Japanese low-cost carrier, Jetstar Japan, in partnership with JAL and Mitsubishi.

The carrier says that the 110 aircraft deal, plus 194 purchase rights and options, will support fleet renewal and growth for the next 10 to 15 years.

"These aircraft will facilitate capacity growth across Jetstar's domestic and international operations, the launch of Jetstar Japan and the establishment of Qantas' new premium Asia-focused airline," said Qantas.

Of the 110 A320s, 106 are firm orders while the remaining four could be either purchased or leased. The 110 A320s include 78 A320neos. The first of the new A320s will arrive in 2012.

"The first of the A320s will be allocated to the new Jetstar Japan venture between the Qantas Group, Japan Airlines and Mitsubishi. We are using the Qantas Group's scale in the aircraft purchasing market to establish this exciting new [low cost] airline," said Alan Joyce, chief executive of Qantas.

 
 © Airbus

The new LCC, due for launch by the end of 2012, will initially operate three Airbus A320s, but this will grow to 24 "within a few years", Australia-based Jetstar Group said. Jetstar added that the "total capitalization commitment" for the new carrier is ¥12 billion ($156 million).

Qantas will also defer the delivery of its final six A380s by up to six years to drive cost savings.

"As our flagship, the A380 is a fabulous aircraft and receives tremendous feedback from our customers. It will continue to lead our long-haul fleet. However, the review and restructure of our international network has led to the decision to defer six of the A380s we have [on] order," said Joyce.

Qantas's A380 fleet will reach 12 aircraft by the end of 2011 and 14 aircraft by the middle of 2013. The remaining six A380s will be delivered to coincide with the retirement of Qantas's last six Boeing 747-400ERs. "Qantas expects to receive the six A380s from 2018 to 2021. The original delivery schedule was for these six A380s to arrive in 2014," said a Qantas spokesman.

In addition, the group will cut 1,000 jobs, stemming mainly from the retirement of older aircraft and network changes.

"Our priority is to allocate capital to those businesses which provide the best return on investment. In this context we will continue to review our capital expenditure. This is an approach we have taken previously with the cancellation of 787 aircraft, and future 787 deliveries, like all aircraft orders, will be reviewed as required," added Joyce.