Paul Phelan/CAIRNS

Talks have broken down between Cathay Pacific and Qantas over the Australian carrier's plans to acquire up to five RB.211-524D4-powered Boeing 747-200s, with airline sources confirming that the carrier expects to consider a wider range of options in the wake of the Asian downturn.

These aircraft include new Boeing 747-400s, 767s or 777s, likely to be available as airlines try to shed orders.

The move comes as Qantas and its rival, Ansett Australia, undertake a series of route consolidations and capacity reshuffles to take account of the downturn in Asia.

Qantas, which recently announced that it would phase out the four Airbus A300B4s it operates on Australian domestic services over the coming 18 months, still wants to recover the 747-200 it has on lease to Air Pacific, which is due to be returned at the beginning of August, although they could be subject to a one year extension. Return of the aircraft would in turn put Air Pacific back in the market for an RB.211-powered 747, but Qantas says that no decision on lease extension has yet been made.

Also of strategic interest to Qantas is the filling of Asia-Europe demand, which the carrier believes is likely to heighten as Asian airlines default on air service agreement commitments between Australia and the UK.

Any Qantas fleet regrouping will probably focus on putting further capacity pressure on Ansett, now seeking to cut costs on marginal services, while it contemplates a radical review of its regional and route development strategies. Signalling that it expects a drop in aircraft use, Ansett now wants to shed at least four 747 captains on secondment to Singapore Airlines and four Boeing 737 crews to Aer Lingus-owned crewing and engineering support agency PARC International. The Irish agency is seeking pilots for leave of absence assignment to Sterling European Airways of Copenhagen.

"We have spare capacity because we've stopped operations to South Korea," says Ansett. "We're looking at going into Shanghai, where there is reasonable growth. We're cutting flying, and looking at different ways to deploy capacity."

Cathay Pacific is now believed to be close to a deal with Virgin Atlantic for two of the 747-200s, and Virgin has also been negotiating with Air New Zealand for at least one aircraft, which is understood to be for onward lease to Air Pacific.

Source: Flight International