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Qantas bets on Sydney-London non-stop with Airbus order

May 02, 2022 / 5:01 PM
Qantas Airways CEO Alan Joyce along with other officials attend the ceremony of an Airbus A350-1000 aircraft fleet announcement at Sydney ...
Sharjah 24 – Reuters: Qantas Airways QAN.AX will fly non-stop from Sydney to London after ordering a dozen special Airbus AIR.PA jets, charging higher fares in a multi-billion dollar bet that fliers will pay a premium to save four hours on the popular route.
To be launched late in 2025, the flights will use A350-1000 aircraft specially configured with extra premium seating and reduced overall capacity to ferry up to 238 passengers on a 20-hour trip - the world's longest direct commercial flight.

The long-discussed breakthrough will give Qantas a marketing boost on what has long been called the "kangaroo route" - because all flights had to hop, stopping somewhere for fuel. Rivals offering one-stop services will include Singapore Airlines Ltd SIAL.SI, Emirates and Qatar Airways.

High fuel costs and low cabin density mean a sizeable revenue premium is required to make Qantas's non-stop flights viable, however. The airline did not say what it would charge.

Announcing plans for the service on Monday, Qantas said a strong recovery in the domestic market and signs of an improvement in international flying after the worst of the COVID-19 pandemic had given it the confidence to make a major investment in its future. The airline forecasts a return to profit in the financial year starting July.

The order from the European aircraft maker also includes 40 narrowbody A321XLR and A220 jets to start the replacement of Qantas's ageing domestic fleet, with deliveries spread over a decade. The airline did not disclose the value of the deal, but analysts at Barrenjoey estimated in a client note it would cost at least A$6 billion ($4.23 billion).

"Since the start of the calendar year, we have seen huge increases in demand," Qantas Chief Executive Alan Joyce told reporters at Sydney Airport, where an Airbus A350-1000 test plane flown from France emblazoned with the Qantas logo and "Our Spirit flies further" was parked in a hangar as a backdrop for the announcement.

Qantas shares closed up 3% at the highest level since November after it also said debt levels had fallen to pre-COVID levels faster than the market's expectations. Airbus shares slipped 1% in early trading. 

The A350-1000 order was the culmination of a challenge called Project Sunrise set for Airbus and rival Boeing Co BA.N in 2017 to create aircraft capable of the record-breaking flights.

May 02, 2022 / 5:01 PM

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