Airbus dominance over a multibillion-dollar aircraft order from Qantas Airways has dealt a blow to a reborn Boeing and its 737 MAX just as the aviation industry contemplates a way out of its worst crisis. story.
The Australian carrier said Thursday it will buy 40 Airbus jets with a list price of at least $ 4.6 billion before discounts, with options to purchase 94 additional jets over more than a decade. The planes are replacing Qantas’ aging fleet of nearly 100 Boeing 737s and 717s – some of which are around 20 years old – which are still the airline’s national workhorses.
The move, first reported by Bloomberg, is a coup for Airbus as it strives to match Boeing’s Max order windfall by the end of the year. The European aircraft manufacturer also won a contract from Singapore Airlines Ltd. on Wednesday. for its A350 freighter and has the opportunity to move forward with Air France-KLM, which is preparing to announce the replacement of its aging Boeing 737s.
This commitment means that Qantas and its low-cost Jetstar division will likely be operating Airbus aircraft primarily on their domestic and international networks for decades to come. The Boeing Dreamliner, still favored by Qantas on some popular long-haul routes, now appears to be the US company’s only significant presence in the Australian airline’s fleet.
Boeing pushed the 737 MAX after the plane was cleared for flight again following two crashes. These disasters in Indonesia and Ethiopia in late 2018 and early 2019 killed 346 people and led to the worldwide grounding of the plane. Securing Qantas – famous for its safety record in the age of jets – as a buyer of MAX would have been a further step towards the aircraft’s rehabilitation.
Instead, Qantas is putting its weight behind Airbus. The airline’s latest order comes on top of the existing agreement between Jetstar and Airbus for more than 100 aircraft in the A320neo range. In total, the Qantas Group will be able to operate around 300 new A320 and A220 aircraft over the next decade as part of the largest order in Australian aviation history.
With so much on the table, competition between manufacturers was particularly fierce, and Qantas looked at the different planes for six months. Airbus’ campaign for the order “pushed the boundaries” of “operational and financial assessment”, according to commercial director Christian Scherer. In a statement, Boeing said it was “disappointed” with the result but respected Qantas’ decision.
The Chicago-based manufacturer has used discount sales to help compensate customers for lost revenue after regulators grounded the Max. But with the model selling strongly and delivery windows filling up, Boeing executives signaled in October that they were focusing on “price discipline.”
Boeing shares fell in New York before erasing declines following an announcement by the Federal Reserve that it expects to raise interest rates in 2022 faster than expected.
Qantas shares climbed 2.3% early in Thursday before closing 0.6% lower in Sydney, giving the airline a market value of around $ 6.5 billion.
Qantas is the latest carrier to bet that travel will eventually rebound even with the threat of the new variant of the omicron coronavirus hanging over the world. Virgin Australia, a domestic rival emerging from restructuring, has already unveiled an order for 25 of Boeing’s larger 737 MAX model.
According to Alan Joyce, CEO of Qantas, now is the perfect time to buy planes as manufacturers are eager to secure sales and offer great prices. The new planes will also reduce fuel and maintenance costs, while reducing carbon emissions.
âIt’s a clear sign of our confidence in the future,â Joyce said. “We set the prices just ahead of what is likely to be a surge in demand for next-generation narrow-body aircraft.”
And the Australian national carrier is considering even more planes as it continues its plan to launch long-haul flights halfway around the world. Nonstop services connecting Sydney to New York and London, a project challenged by COVID, are expected to start as early as 2024.
Qantas has already chosen the Airbus A350-1000 as its preferred aircraft for flights and is expected to decide on a firm order for aircraft in early 2022.