Qantas CEO: no plans to buy more Airbus A380s

Qantas CEO: no plans to buy more Airbus A380s

Qantas CEO Alan Joyce says the airline has no plans to buy any more Airbus A380s, including the eight superjumbos still listed on the order books at Airbus HQ.

The Flying Kangaroo currently runs twelve of the double-deck jets on flagship routes to Los Angeles, Dallas and London, with the final eight initially announced in 2006 as "firm orders" by then-CEO Geoff Dixon, with deliveries through to 2015.

Qantas has repeatedly hit pause on that schedule, however, with Joyce now confirming he sees no place for the remaining eight superjumbos in the network.

Speaking at the CAPA Australia Pacific Summit 2016, Joyce said that Qantas is “continually pushing those aircraft (deliveries) out, so our intention is that we’re not taking those aircraft.”

“We have 12 aircraft and the 12 aircraft we have are fantastic aircraft and actually serve the missions we have,” Joyce continues.

“We believe there’s a network for 12: it’s very good and it works very well. We struggle with a network for the next eight, so that’s why we keep pushing them back.”

While the orders haven't been cancelled outright, Joyce says they'll sit on the books for at least the next 10 years but the airline won't make good on them, instead preferring to “keep on pushing them out”.

After the A380...

Qantas is now considering both the Boeing 777X and the ultra-long range Airbus A350-900ULR for its post-2020 fleet, especially as the airline begins to redraw its network map around non-stop flights of 16+ hours.

Earlier this year Joyce said he was "absolutely" looking at the A350-900ULR, which Singapore Airlines will begin flying in 2018 to relaunch non-stop flights from Singapore to Los Angeles and New York.

Also read: Can Singapore Airlines' Airbus A350 redefine long-range flying?

"You always look at all the options out there to make sure you're picking the one with the right economics" Joyce said, stacking the long-legged A350 against the Boeing 777-8X.

But Boeing is also in the frame, with Qantas International CEO Gareth Evans adding that "we're really interested in aircraft that can fly a very long way, and the 777-8X and 9X are very interesting aeroplanes for us in the long term."

Read more: Qantas considering ultra-long range Airbus A350-900ULR

Four engines vs two engines

Even so, some routes in the Qantas network – particularly Sydney-Johannesburg – require four-engined aircraft due to safety requirements, potentially demanding something more than the Boeing 787s Qantas currently has on order.

With its Boeing 747s set for retirement and no plans to firm-up the remaining A380s, Australian Business Traveller asked Joyce if its Southern Hemisphere routes remained part of Qantas’ long-term plan.

“Johannesburg and South America are particularly important markets for us,” Joyce imparts, “but we have some very, very young 747s which we took in the mid-2000s.”

“We recently put new product on them, and our intention is that those aircraft are going to be in the fleet for some time. There’s no immediate need for us to make a decision for an aircraft replacement in those markets.”

Joyce concludes by hinting that “as the technology on twin engines improves, there will be alternative aircraft” available instead to serve those destinations in the future.

Also read: Qantas to fly first Boeing 787 in October 2017

Follow Australian Business Traveller on Twitter: we're @AusBT

Chris Chamberlin

Chris Chamberlin (ChrisCh)

[email protected] / @ChamberlinChris

Chris Chamberlin is a senior journalist with Australian Business Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!
 

46 Comments

  • aldrigsomandre

    aldrigsomandre

    5 Aug, 2016 11:31 am

    Does this mean that the CASA won't allow 2-engine operations to South America or Africa anytime soon?

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  • johnaboxall

    johnaboxall

    5 Aug, 2016 12:04 pm

    2-engine to Africa is possible, VA used to fly their 777 to JNB... however they didn't have the right ETOPS rating [?] so the extra flight time staying closer to possible landing zones killed it.

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  • Craig Dennington

    cdinoz

    5 Aug, 2016 04:53 pm

    Sounds like it. The FAA and the EASA  gave the A350 a 370 minute etops rating... If CASA followed suit, the A350 could easily do SYD to JNB. 

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  • FLX

    FLX1

    5 Aug, 2016 08:37 pm

    @cdinoz:

    My guess is that ETOPS 370 is a very new regime to regulate even for FAA+EASA.  Heck, an ETOPS 370-capable/certified type didn't even existed before the advent of 359 which EIS only 1.5yrs ago.

    Naturally, CASA would like to observe/collect data on how it works worldwide for some yrs(e.g. less than 30 frames are in service today and none is actually deployed on routes beyond ETOPS 207...let alone ETOPS 370) before jumping onto the ETOPS 370 bandwagon.  I est. it's gonna take CASA till well after 2020 to consider ETOPS 370 adoption....the oldest 744ER @ QF will still be only 18yrs old by 2020. 

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  • Rufus1

    Rufus1

    10 Aug, 2016 12:56 am

    ETOPS 370??

    I tell you what, I'd prefer not to be in a single-engined airliner, over 6 hours from the nearest airfield, and knowing that some problem with the aircraft or its systems had already caused one engine to fail...

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  • moa999

    moa999

    5 Aug, 2016 07:23 pm

    LAN has been operating its 787 using ETOPS330 on Sth America to NZ for some time now. I suspect this puts some pressure on CASA to allow QF to do the same

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  • FLX

    FLX1

    5 Aug, 2016 08:58 pm

    @ moa999:

    ETOPS 330 is also a relatively new regime to regulate.  However, the 787 type certified under ETOPS 330 has been in service for much longer(along with a much much larger global fleet in service to collect data) than the 350 type certified under ETOPS 370.

    CASA will clearly hv an easier time/quicker to justify ETOPS 330 adoption than ETOPS 370.  No immediate rush for CASA to do so though as QF is not due to receive its 1st 789 and then hv enough deliveries to actually deploy 1 on SYD-SCL until 2018 @ the earliest.

    ETOPS 370 is a diff story for CASA and ETOPS 330 is probably insufficient for SYD-JNB route.

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  • Arcanum

    Arcanum

    9 Aug, 2016 06:13 am

    According to gcmap.com, both SYD-JNB and PER-JNB would be within ETOPS 330.  PER-JNB is just about within ETOPS 240.

    I wonder if QF would ever consider running SYD-PER-JNB on an A330.  Make it a same-plane service to minimize inconvenience for SYD passengers.  PER-JNB is within the range of both the A332 and A333 I believe.

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  • turbojezz

    turbojezz

    5 Aug, 2016 01:13 pm

    while this makes me sad that there will be no more A380s for qantas (and therefore most likely no more first class) this is also good cause the 747s will hang around a bit longer :) they are still beatifuul to watch fly :)

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  • F-Flyer

    F-Flyer

    5 Aug, 2016 01:33 pm

    They might be beautiful to look at but they are certainly not beautiful to fly in.

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  • Serg

    Serg

    6 Aug, 2016 01:16 pm

    Why? I have no problems with 747 whatsoever. Moreover if someone insist that 787 or 350 is better than 747 to fly in because there is higher pressure in cabin, I will agree. However 380 is no better to be in and seated in your seat (as long as seats the same) than 747. I do not use that pathetic voting system, but I strongly disagree with your statement.

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  • PeterBla

    PeterBla

    10 Aug, 2016 03:18 pm

    I have a problem with the 747!  The noise levels in a 747 are consderably louder than the A380.  Noise dosage is the sound level by length of exposure.  On a SYD/LAX trip, my ears become sore when using over-ear type noise cancelling headphones and I take them off (yes, tried Bose, Sony, Sennheiser, Audio Technica) after 8 hours. 

    The noise dose on an A380 is considerably lower. Lower dose = reduced tiredness. This lwere noise also makes the NC headhpones sound better, as the processing level is reduced. Give me the A380 any day.

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  • mviy

    mviy

    5 Aug, 2016 02:07 pm

    Couldn't QANTAS put first class seats in whatever they eventually replace the A380 with? QANTAS will presumably be using the A380s they already have for some time yet.

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  • Himeno

    Himeno

    5 Aug, 2016 04:23 pm

    Such as a 4 class 777-8X with 4 F seats?

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  • FLX

    FLX1

    5 Aug, 2016 09:21 pm

    @Himeno:

    Or a 4-class 779 with 8-12 F seats?  In similar cabin density, 779 has sufficient payload/range to fly any route where QF deploys a  388 today.  The only diff is that a 779 can carry way more Rev$ cargo in the belly than a 388.

    Re-read Mr Evans'(CEO QF Int'l) comment and you'll notice that he did included 777-9X as a "..very interesting aeroplanes for us in the long term.".

    I think this is the 1st time someone in QF top mgmt actually mentioned 779(They've been talking about 778/359ULR for a while including AJ himself) as a possibility in QF future fleet.

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  • Arcanum

    Arcanum

    9 Aug, 2016 06:33 am

    Agreed with both mviy and FLX.  Lots of airlines have 8 F seats currently on the 77W, so a cabin that size on the 778 or 779 wouldn't be an issue.

    Let's be honest.  I love flying F on the QF A380, but I certainly wouldn't say it beats what JL, NH, or CX offer on the 77W.  QF hasn't done anything "special" with the extra space available on the A380 the way EK and EY have.  They don't even offer bigger bathrooms in F like LH and TG.

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  • Mark Waite

    Mark Waite

    5 Aug, 2016 02:15 pm

    Interesting.

    So the ULRs will (supposedly) be filling new routes, the surviving 747s the southern ocean routes - what was AJ's response when you asked what was happening to the current 747 routes which are neither, eg BNE-LAX, LAX-JFK etc etc?

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  • Himeno

    Himeno

    5 Aug, 2016 04:16 pm

    BNE-LAX-JFK, SYD-SFO, SYD-YVR and maybe SYD-HKG and SYD-HND are likely to be the first 747 routes to be replaced with 787s.

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  • FLX

    FLX1

    5 Aug, 2016 10:20 pm

    @ Himeno:

    LAX-JFK =744 has been providing way too many seats for too long.  Downgauge to 789 or similar is overdue.

    BNE-LAX, SYD-SFO, SYD-YVR =None is slot constrained and all likely needed more frequencies(e.g. @ least daily) but not necessarily more total seat supply.  Downgauge fm 744 to 789 likely a top priority.

    SYD-HKG, SYD-HND =Not sure these are priority for 789 replacing 744.  Slot is an issue and QF still hv plenty of 744ERs to fly these beyond their SYD-SCL/JNB missions which are not even daily.

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  • GregXL

    GregXL

    5 Aug, 2016 11:29 pm

    Not long ago LAX-JFK was operated by A332s.

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  • StudiodeKadent

    StudiodeKadent

    6 Aug, 2016 02:16 pm

    I agree with you, SYD-HKG and SYD-HND are premium routes with slot constraints so I wouldn't expect 787s to be placed on them (or at least not the 787-9... if QF buy 787-10s then I can see them being used on the HKG and HND routes). Instead, I'd think QF, presuming they buy 777Xs, will put the new jets on those routes immediately to replace 747s without compromising capacity substantially.

    But SYD-SFO has pretty good load factors and is going daily IIRC, so I doubt that will get downgauged to a 787-9. If anything, it will probably be another 777X route since SFO has quite a bit of premium demand. If 787-9s operate the route I'd suspect we'd have dailies between SFO and both SYD/MEL.

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  • Dean

    deany83

    5 Aug, 2016 02:21 pm

    Is there a financial impact of not taking the remaining orders? 

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  • patrickk

    patrickk

    5 Aug, 2016 02:59 pm

    Deany,

    There will be, but by pushing it back ten years to 2025 they can renegotiate another deal with Airbus and keep the door open if there is an A380NEO to replace the current dozen. It would be silly not to keep that door ajar. The focus seems to be long distance trips with fewer intermediate stops. There wll however still be a need for big aircraft to slot constrained airports like Heathrow and also to use hubs like Dubai.

    By 2025 there should answer to a lot of these issues (new runways Heathrow, Sydney, Dubai and HK) and then  sensible decisions can be made. In the interim the 787-9 and 787-10 can replace a lot of current capacity and the newer 747s will be be around until then (2025) and from 2020 or so we might see A359ULR or 777-8 coming into play for non stop New York and possibly LHR. Then in 2025  they will think about 777-9 A350-1000 or A380NEO for the big capacity trunk routes such as LA and LHR. A lot of water under the bridge before that happens.

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  • AlexT

    AlexT

    5 Aug, 2016 03:13 pm

    I think Qantas would more likely replace the 12 A380s with say 20 A350s. Or even, maybe with some hard negotiation, convert the orders to many more A320neos for Jetstar. 

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  • FLX

    FLX1

    6 Aug, 2016 12:12 am

    AlexT:

    In contrast, I think QF would more likely replace the 380 x12 in QF service today with 779 x15.  But that won't happen until well after 2025.  Those 380 x8 delayed by QF perpetually is a diff story.

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  • Lifestobelived

    Lifestobelived

    5 Aug, 2016 03:26 pm

    Who knows, if they keep pushing the orders out further and Airbus in the mean time decides there isn't enough demand and closes down the production line maybe they'll get away with it???

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  • AJW

    AJW

    5 Aug, 2016 07:10 pm

    Article in Australian Aviation says Airbus is not planning on shutting down the A380 line anytime soon. Article went on to suggest that as cities continue to grow, and airports don't grow accordingly that demand for the A380 should pick up in the next 5-10 years.

    They are slowing production to 1.5 a month, which on current reamining orders means another 5 years without any new orders.

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  • FLX

    FLX1

    6 Aug, 2016 12:04 am

    @ AJW:

    "Article went on to suggest that as cities continue to grow, and airports don't grow.....demand for the A380 should pick up in the next 5-10 years."

    And how many times we've already heard the exact same 380 sales prediction?  5-10 years ago, I vividly recall hearing the same "next 5-10 years" prediction fm Airbus+380 supporters and today, we hear the same.  I bet you 5-10years later if the 380 program is not yet shut down, we'll hear it again....

    Frankly, the article's suggestion sounds more like Airbus PR(or @ least paraphrasing) than a conclusion from any new, insightful mkt analysis re 380 demand....

    "They are slowing production to 1.5 a month.."

    Actually, current plan is to go down to 1 per mth from 2018.  See details on flightglobal.com article dated 15Jul16.

     "...on current reamining orders means another 5 years without any new orders."

    Actually, 5yrs is right.  The entire backlog will be cleared by 2021 even @ 1 per mth rate fm 2018.  This is because some backlogs are not real backlogs such as QF's publicly declared intention to delay delivery perpetually.  If we look carefully @ that so-called firm backlog(126), only those for EK(61), SQ(5), EY(2), QR(4), OZ(2) and NH(3) will actually hv any real hope of delivery so only 77.  10 of these will be out of the door by 31Dec16 per current 2 per mth rate.  Nex yr, 18 more on 1.5 per mth rate.  By 2018, only 49 will remain in the backlog and all will be gone by 2021 on 1 per mth rate.

    But the real problem for Airbus is not how long it can sustain 380 program till 2021.  As Airbus CEO himself has stated, it's how not to lose too much $ by producing 1 per mth....in a 380 production system scaled to breakeven @ 2 per mth minimum.  It's almost financially irrational to justify 380Neo when 380Ceo will be losing so much $ @ the end.

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  • FLX

    FLX1

    5 Aug, 2016 11:13 pm

    @ patrickk:

    "...keep the door open if there is an A380NEO to replace the current dozen....would be silly not to keep that door ajar."

    Or alternatively, may be smarter to just cancel the outstanding order for 380 x8 and get back whatever tiny deposit now and then order again AFTER Airbus make up its mind re 380Neo.  Today's order backlog for any 380, Neo or not, is not exactly large unlike the 350/787.  If a customer is dying to get a 380Neo quickly, Airbus will sure be happy to raise production rate(Scheduled to deccelerate to 1 per mth fm 2018 for an assembly line DESIGNED/SCALED to build upto 4 per mth) to accommodate.

    "There will however still be a need for big aircraft to slot constrained airports.."

    Agree but the needs are far more limited/niche now relative to needs for other mission/airport types.  Besides, there's viable alternative to a 388 now as the 779 is no small potato.  779 x5 slots handle similar total seat count as 388 x4 slots but along with far more Rev$ cargo....possibly equivalent to a fully loaded 332F x1 slot so you end up with no savings in slot utilization by choosing the 388.

    "Then in 2025 they will think about 777-9 A350-1000 or A380NEO for the big capacity trunk routes..."

    Don't you find it interesting that among the 3 types you've stated, CEO QF Int'l mentioned 1 of them but not the other 2?  Just a simple slip of the mind?  May be more likely a clue to the corp vision of which type will be the flagship of QF fleet after 388....

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  • patrickk

    patrickk

    6 Aug, 2016 09:09 pm

    FLX I mentioned the A350 as a replacement simply because AJ put the A359ULR in the mix for Syd-New York et al. If they got an A359ULR for that then it makes sense for a A350-1000 (or 2000) for the high capacity work, for commonality reasons.

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  • Arcanum

    Arcanum

    9 Aug, 2016 07:47 am

    @patrickk:  I have yet to be convinced QF will actually order the A359ULR.  From what I've read, the range on it is about 16,000 km.  That's enough for SIN-EWR but not for SYD-JFK, which is the only route which (might) have enough premium demand to justify such a non-stop.

    Investing in a special subfleet like this also only makes sense if it lets you capture additional valuable premium-cabin business.  SQ currently serves New York via FRA, which means they're competing with the top carriers from Asia, the Middle East, and Europe.  In that context, offering the only non-stop service would give SQ an advantage.

    New York to Sydney is a completely different market.  Flying via Asia or the Middle East amounts to a considerable detour, so QF is really only competing with the North American and Australasian carriers.  Since most of them offer an inferior product, QF already dominates the NA-OZ market.  Therefore, a non-stop SYD-JFK service would likely cannibalize QF's own traffic as much or more than it would steal from UA/DL/etc.

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  • Himeno

    Himeno

    9 Aug, 2016 01:49 pm

    Travel times for AU-JFK via US west coast or NE Asian hubs (eg TYO/HKG) are simliar.

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  • Arcanum

    Arcanum

    20 Aug, 2016 07:40 am

    Nope.  SYD-JFK is about 21 hours via LAX on QF/AA, 24 hours via NRT on JL, and 26 hours via HKG on CX.


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  • Arcanum

    Arcanum

    9 Aug, 2016 07:04 am

    It's always hard to know the motivation with executives.  Could be a slip of the tongue, could be posturing for future negotiations.

    As for the 777-9 vs. A350-1000 vs. A380neo, it's an easy choice if they had to make it today.  The 777-9 will hold 400-425 pax in a two-cabin configuration vs. 369-387 for the A350-1000, so for "the big capacity trunk routes" the 777-9 wins.  The A380neo would hold even more, of course, but at this point at this point it's still quite hypothetical (though I suspect it will eventually get built).

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  • skystar

    skystar

    10 Aug, 2016 07:57 pm

    A380NEO will never happen,they have yet to break even on the current model and Emirates are the only carrier pushing it.For all its passenger appeal the airlines have spoken and the big twins are the future.At least the 747-8 has a market as a freighter yet you cannot even use a 380 as a freighter.

    How long are the 747s going to be in service when the oil price starts to go up.

    Qantas had outstanding A320 orders from the Australian Airlines takeover and did not take up the orders and they used the holding deposits for maintenance on the four inherited A300s so i would say the A380 options would be converted to other Airbus models.

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  • Himeno

    Himeno

    5 Aug, 2016 04:22 pm

    QF has 8 confirmed orders and 4 options for A380s.

    If QF outright cancels them, they may own Airbus some $$. If Airbus keeps the program going and brings out a A380NEO in a few years, then QF might take them to replace the current 12. They could be converted into other Airbus products.

    The question is what happens if Airbus ends the 380 program while these orders are still on the books. Would QF be forced to cancel or convert? Would QF have to pay a penalty in such a case, or would Airbus owe QF a penalty instead.

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  • FLX

    FLX1

    5 Aug, 2016 10:32 pm

    @ deany83:

    IMHO, little financial impact if any at all.  Many folks seem to hv forgotten that a decade ago, all 380 x12 delivered to QF were delayed due to Airbus issues...it was Airbus which incurred $ penalty initially.  This could partially be in the form of large % of deposit for the whole deal(380 x20 firm order) refunded by Airbus to QF.  Whatever remaining as deposit by QF for the outstanding 380 x8 may be insignificant.

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  • Himeno

    Himeno

    5 Aug, 2016 04:15 pm

    It isn't that the twin aircraft aren't safe for the southern routes, it's that CASA won't approve the ETOPS needed to run those routes effectively with twins. The twin aircraft flying today have the needed ETOPS type ratings from every other major regulator, but if CASA refuses to give QF and VA the needed operator rating, there is no point their trying to operate twins on those routes.

    When VA operated MEL-JNB, they couldn't take the "short cut" across the southern ocean that QF and SA could and had to route north to stay within 180 mins (on one engine) of airfields such as Diego Garcia, adding almost 3 hours to the flight time.

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  • bl812

    bl812

    5 Aug, 2016 09:04 pm

    seems this bird hardly makes any profit-airbus will be lucky to get even on this project.it's a shame as it's a good plane comparing to the 747

    the only orders are the current ones for emirates when they finish ordering that will be the death of this beauty.

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  • Himeno

    Himeno

    6 Aug, 2016 08:22 pm

    There are 4 complete/near complete A380s stored at TLS. 2 of which were meant for Skymark. It appears those 2 are being converted to go to EK.

    There are currently 126 outstanding confirmed orders. 81 are for EK.

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  • TheRealBabushka

    TheRealBabushka

    5 Aug, 2016 11:03 pm

    Cathay Pacific is sitting back laughing. The question back then is why Cathay has not bought A380s. It seems Airbus has overcooked the case for capacity-heavy point to point. It risks being overly reliant on Emirates to fill its A380 order book.

    What will happen to the investment in terminals around the world? And those airlines with A380; it seems like the resale market for second-hand A380 will be quite tepid. Would airlines like SQ simply have to write these off? Implications for shareholders?

    Dont get me wrong. A380 is a lovely aircraft. But perhaps the market has realised the optimal operating cost and capacity/frequency ratio?

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  • FLX

    FLX1

    6 Aug, 2016 12:22 am

    @ TheRealBabushka:

    "Dont get me wrong. A380 is a lovely aircraft."

    So was the Concorde.  Despite being dead for so long, I bet U Concorde lovers/admirers worldwide today still out-number 380 lovers/admirers.

    But no matter how lovely as an aircraft, the biz case/financial justifications for the Concorde program is still worse than iffy. 

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  • patrickk

    patrickk

    7 Aug, 2016 09:22 am

    Babushka,

    Likewise the 779 is reliant on EK as well with it holding half the orders. The 779 isn't exactly going our the door either with just 253 orders and none for the past two years. Likewise the A350-1000 with only 200.  The sweetspot seems to be 300 seats and not 400. But things may change in the next five years, and larger planes come into the frame.  QF have some good options for the next fleet type (circa 2022) and should bb able to squeeze a good price.

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  • ausdt

    ausdt

    6 Aug, 2016 12:36 am

    I would say my six month old son is "very, very young". I would not say the 13 and 14 year old B747s delivered in 2002 and 2003 are "very, very young".

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  • GregXL

    GregXL

    6 Aug, 2016 09:34 am

    Maybe he should have said that the youngest one is only half the age of the oldest 747 in the QF fleet!   I thought it was a stretch to describe 2002 as mid-2000s.  Irrespective, all 9 of the refurbs have a lot of years left in them.  I think they will end up keeping them all until they add a long range aircraft that fits between the 787-9 and the A380.  

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  • zoomzoom

    zoomzoom

    10 Aug, 2016 03:49 pm

    And just wait until they have to take the write down hit on those 12.....I bet AJ departs before that is necessary.

     

    Should have bought the 777 boys.

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