Qantas has made significant changes to its plans for an Asian-based premium carrier, and is now negotiating with Malaysia Airlines (MAS) for a joint-venture based on some of the Airbus A330 aircraft that MAS has on order.
The Australian carrier had previously said it wanted to set up the premium carrier in either Malaysia or Singapore, using eight of the 110 A320s that it had ordered. But Qantas CEO Alan Joyce says that Qantas is now pursuing a “capital-light” plan for the start-up, as it looks to cut capital expenditure.
Singapore is no longer being considered as the location, and discussions are continuing with MAS about a Kuala Lumpur base. No announcement is expected for at least a couple of months, however.
A330s will be used since MAS already has significant orders for these aircraft, AviationWeek has learned. The carriers are still expected to aim the carrier at the premium market, although they will be configured with two classes.
The eight A320 orders that Qantas had earmarked for the new carrier will not be canceled and will be used for other purposes instead. Qantas was in discussions with Airbus about long-range version of the A320 for the Asia-based airline, but there is not expected to be a significant financial penalty for converting these orders to the standard version.
Qantas is aiming to reduce capital expenditure to AU$2.3 billion ($2.5 billion) for fiscal year 2012, compared to the previously planned AU$2.5 billion. As well as the reduced spending on the premium carrier, Qantas will save money due to the deferral of Boeing 787 deliveries caused by manufacturer delays.
In fiscal 2013 Qantas plans to cut capital expenditure to AU$2.3 billion, compared to previous estimates of AU$2.8 billion. The carrier has signaled that this reduction will likely be increased, primarily through canceling, delaying or restructuring existing orders.
In another major cost-cutting measure, Qantas announced a review of its heavy maintenance facilities. The carrier intends to close at least one of its three heavy maintenance bases, Joyce says. Additionally, the carrier is consolidating a wide range of engineering and administrative work to Sydney.
These changes announced so far will result in 500 positions being eliminated, and Joyce says more cuts will likely be needed as the result of reviews. However, he stresses that no jobs are being outsourced overseas.
Qantas has also announced further changes to its international services. It will cut flights from Los Angeles to Auckland and from Singapore to Mumbai in May. The airline will replace Boeing 747s with A330s on its Sydney-Bangkok route in June, and will downgauge the Sydney-Auckland flights from A330s to 737-800s. Service will be added to the Los Angeles-New York route, and Tokyo routes, using 747s.
On its domestic network, Qantas will add A330s on its Melbourne-Perth route, and will replace 747-400s with A330s on certain Sydney-Perth flights.
Due to these network changes, Qantas is retiring an additional two 747s in addition to the four it will retire in April.
For the six months through Dec. 31 2011, Qantas reported an underlying profit before tax of AU$202 million, less than half the profit from the same period in 2010. Strikes had an AU$194 million negative effect, and fuel costs were up by AU$444 million.
source: http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=comm&id=news/awx/2012/02/16/awx_02_16_2012_p0-426369.xml&headline=Qantas%20Target
The Australian carrier had previously said it wanted to set up the premium carrier in either Malaysia or Singapore, using eight of the 110 A320s that it had ordered. But Qantas CEO Alan Joyce says that Qantas is now pursuing a “capital-light” plan for the start-up, as it looks to cut capital expenditure.
Singapore is no longer being considered as the location, and discussions are continuing with MAS about a Kuala Lumpur base. No announcement is expected for at least a couple of months, however.
A330s will be used since MAS already has significant orders for these aircraft, AviationWeek has learned. The carriers are still expected to aim the carrier at the premium market, although they will be configured with two classes.
The eight A320 orders that Qantas had earmarked for the new carrier will not be canceled and will be used for other purposes instead. Qantas was in discussions with Airbus about long-range version of the A320 for the Asia-based airline, but there is not expected to be a significant financial penalty for converting these orders to the standard version.
Qantas is aiming to reduce capital expenditure to AU$2.3 billion ($2.5 billion) for fiscal year 2012, compared to the previously planned AU$2.5 billion. As well as the reduced spending on the premium carrier, Qantas will save money due to the deferral of Boeing 787 deliveries caused by manufacturer delays.
In fiscal 2013 Qantas plans to cut capital expenditure to AU$2.3 billion, compared to previous estimates of AU$2.8 billion. The carrier has signaled that this reduction will likely be increased, primarily through canceling, delaying or restructuring existing orders.
In another major cost-cutting measure, Qantas announced a review of its heavy maintenance facilities. The carrier intends to close at least one of its three heavy maintenance bases, Joyce says. Additionally, the carrier is consolidating a wide range of engineering and administrative work to Sydney.
These changes announced so far will result in 500 positions being eliminated, and Joyce says more cuts will likely be needed as the result of reviews. However, he stresses that no jobs are being outsourced overseas.
Qantas has also announced further changes to its international services. It will cut flights from Los Angeles to Auckland and from Singapore to Mumbai in May. The airline will replace Boeing 747s with A330s on its Sydney-Bangkok route in June, and will downgauge the Sydney-Auckland flights from A330s to 737-800s. Service will be added to the Los Angeles-New York route, and Tokyo routes, using 747s.
On its domestic network, Qantas will add A330s on its Melbourne-Perth route, and will replace 747-400s with A330s on certain Sydney-Perth flights.
Due to these network changes, Qantas is retiring an additional two 747s in addition to the four it will retire in April.
For the six months through Dec. 31 2011, Qantas reported an underlying profit before tax of AU$202 million, less than half the profit from the same period in 2010. Strikes had an AU$194 million negative effect, and fuel costs were up by AU$444 million.
source: http://www.aviationweek.com/aw/generic/story_channel.jsp?channel=comm&id=news/awx/2012/02/16/awx_02_16_2012_p0-426369.xml&headline=Qantas%20Target
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