Jetstar will operate the Boeing 787-8 alongside the forthcoming Airbus A321neoLR on some Australia-Bali routes, the chief executive of the Qantas-owned low-cost carrier says.
Eighteen A321neoLR aircraft are due to join the Jetstar Australia and New Zealand fleet from mid-2020 to 2022 after Qantas announced in February it had restructured its long-standing Airbus A320neo order to include 18 long-range A321neoLR aircraft.
Jetstar has earmarked the A321neoLR for both Australian domestic flights and services to Bali from Melbourne (2,363nm) and Sydney (2,495mm).
That would free up Boeing 787-8s currently serving Bali to be redeployed to other destinations in China, Thailand and Vietnam, as well as Honolulu in the United States.
However, the 787s will not disappear completely from the Bali route, ensuring that Jetstar would continue to offer a business class product to the popular Indonesian tourist destination.
“What we are not doing is we are not replacing the 787s to Bali,” Jetstar CEO Gareth Evans told delegates at the Routes Asia 2018 conference in Brisbane on Sunday.
“They will still have 787s operating to Bali and we will still offer the configuration and the offering that we do today. The opportunity that these aircraft give us is the chance to replace some of that flying with A321s to free up some of those aircraft.”
#Jetstar group CEO Gareth Evans tells #RoutesAsia 2018 the LCC will still operate #Boeing 787s to #Bali once the #Airbus A321neoLRs arrive in 2020. The A321neoLR will only replace some Bali flying. Further, Evans says A321neoLRs “highly unlikely” to have business class #paxex pic.twitter.com/ioV1AdJfvp
— Australian Aviation (@AusAviation) March 18, 2018
Previously the Qantas order of 99 Airbus A320neo (new engine option) family aircraft was structured to comprise 54 A320neo and 45 of the larger A321neo, with deliveries scheduled to begin in 2019.
Instead Qantas now says the order “retains flexibility with the sequencing of the rest of its A320neo order, which is approximately an even split of 232-seat A321LR neos and 186-seat A320neos.”
Qantas placed its original order for the A320neo series in October 2011, while the CFM LEAP-1A engine was selected for the aircraft in 2012.
Evans said in addition to the new technology and lower cost base, the A321neoLR gave Jetstar a flexible aircraft capable of operating domestically in Australia during the day and then an overnight international service from Australia’s east coast to Bali or an international route of similar stage length.
However, the A321neoLR would be flying in domestic Australia for the “vast majority of the time”, he said.
As a consequence, these aircraft were expected follow Jetstar’s single-class narrowbody configuration.
“We haven’t finalised the configuration of these planes yet, but I think it is highly unlikely they will have business class because effectively that will mean we will be introducing business class domestically in Australia,” Evans said.
“I think I would have to go and talk to my boss in very hushed tones if I was thinking about doing that.
“This is going to be a way of adding flexibility to an already great customer offering that we have to Bali and providing the Jetstar fleet with significant flexibility.”
The value of such an aircraft that can seamlessly switch between international and domestic operations had already been shown at Qantas, whose fleet of 18 A330-200s and 10 A330-300s are deployed within Australia, across the Tasman and to Asia and Honolulu.
“We’ve used the A330s in Qantas extremely flexibly and drew in a lot of stability and value into the Qantas network as a result of that,” Evans said.
VIDEO: Jetstar started flying the Boeing 787-8 in 2013 and has 11 of the type in the fleet. Here is a video from Jetstar’s YouTube channel of its first 787-8s going through final assembly
In February, Qantas reported net profit of $607 million for the six months to December 31 2017, with all of the company’s operating segments – Qantas Domestic, Qantas International, Jetstar Group and Qantas Loyalty – profitable, with healthy operating margins.
Qantas chief executive Alan Joyce said the decision to go for the 18 A321neoLRs was made only after Jetstar satisfied the business case for new aircraft amid the competing cases for capital from all parts of the company.
“What’s great about the group at the moment is that we have a lot of the divisions performing really well,” Joyce told reporters on February 22.
“We have to decide where the best business case is, where we’re going to get the best return.
“That business case is extremely strong and it frees up some of the 787s for other expansion.”
Qantas chief financial officer Tino La Spina said at the results presentation the arrival of 18 A321neoLRs would also coincide with the “option to on a seat to seat basis” retire 22 of the A320ceo family of aircraft.
“If we’ve got the particular tailwinds we can choose not to retire those, they’re still quite young aircraft, so we can have the ability to grow,” La Spina said.
“And if we hit headwinds of course we could retire more. So flexibility I think is one of the key themes you’ll see that’s come through in the results.”
The A321neoLR (or A321LR for short) completed its first fight on January 31, kicking off a 100-hour flight test program.
Certification from the European Aviation Safety Agency (EASA) and US Federal Aviation Administration (FAA) is forecast to occur in the second quarter of calendar 2018, with entry into service before the end of the year.
— Jason Rabinowitz (@AirlineFlyer) January 31, 2018
The A321neoLR has a maximum takeoff weight of 97 tonnes and features optional extra fuel tanks to enable the aircraft to have a range of up to 4,000nm.
Aviation thinktank CAPA – Centre for Aviation projected the 18 A321neoLRS would free up the equivalent of three 787-8s for other services.
Further, CAPA said the 18 new narrowbodies would provide limited capacity to experiment with new routes from Australia, given most of these aircraft were already earmarked for existing routes.
“Jetstar has adopted a conservative approach, and has plenty of time to decide on the relatively small number of new long haul narrowbody routes it will launch with A321neoLRs in the early part of next decade,” CAPA said in a research note dated March 7.
“The risk in the relatively conservative approach to long-haul growth is that competitors could beat Jetstar to several new long-haul routes from both Australia and Asia.
The Jetstar website shows the airline operating 12 flights from Melbourne and seven flights from Sydney to Bali a week with 787-8s for the week starting Sunday March 25 2018.
While some LCCs subscribed to the model of a single fleet type in order to keeps costs low and keep their operations simple, Jetstar was a little bit different.
There are four aircraft types in the Jetstar group of airlines across the Asia Pacific – in addition to Australia and New Zealand there are Jetstar-branded airlines based in Japan, Singapore and Vietnam – comprising Airbus A320 and A321 narrowbodies, Boeing 787-8 widebodies and Dash 8 Q300 turboprops.
“You could possibly say we’ve overcomplicated it already but I don’t think that is the case,” Evans explained.
“You’ve got to get a balance between simplicity and getting the right aircraft on the right routes.”
“The 787s have been fantastic for us. They have been great aeroplanes on those thick leisure markets to and from Australia up to Asia and up to Hawaii.”
“The A320s and A321s mixed together works extremely well for us in Australia, and in Japan, in Vietnam and in and out of Singapore. And then we’ve got these turbos operating in the regional markets in New Zealand.”