Qantas slows domestic growth, cuts aircraft orders

written by australianaviation.com.au | June 15, 2011
Qantas is cutting domestic capacity growth.

Qantas has announced it is significantly scaling back group domestic capacity growth over the next two years, which will see it cancel or defer orders for 12 narrowbody airliners.

The airline says that “in response to slower overall growth” that it now plans to grow its domestic capacity by 5.5 per cent for 2011-12, rather than the previously planned eight per cent growth rate. It plans to save $100 million in capital expenditure for the remainder of this financial year, $300 million in capital expenditure for 2011/12, and reduce planned aircraft lease payments by $300 million in 2011-12.

The Qantas Group will now take delivery of 34 aircraft in 2011/12, down from 43 previously planned, and three fewer aircraft in the second half of 2010/11. The aircraft deferrals and cancellations will comprise six Boeing 737-800s on order for Qantas, and six Airbus A320 aircraft on order for Jetstar.

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“The Qantas Group has always taken decisive action to match capacity to demand,” CEO Alan Joyce said.

“With Qantas continuing to lead the premium market and Jetstar offering consistently low fares in the leisure market, we are well placed to retain our profit maximising 65 per cent domestic market share. Our extensive fleet renewal strategy will support growth and improve product for both airlines.”

4 Comments

  • Brett

    says:

    It’s better that the Qantas group sacrifice a few A320s and/or 737s than defer of cancel the badly needed Dreamliners.

  • don

    says:

    looks like the new virgin thing has already put the wind up them!

  • Phill

    says:

    This decision will be looked at in the same way as the Decision not to order the 777 – they had the oportunity to do the right thing and chose not to – sticking with the aging 767 and 737-400, now they cost more to maintain than the newer jets, put all the eggs in one basket, look after Jetstar and do nothing to help Qantas, nice one Mr Joyce

  • Clive Derwent

    says:

    Lots of people go on about the “BAD” buying decisions. What about the good ones! If the 787 had entered service on the original timeline put out by Boeing we would be applauding Qantas’s buying decisions. It is true that Qantas should have bought the 777-300ER to replace 747-400s’ great with the benefit of hindsight. NB; the 737-400 is being phased out and replaced by the 737-800, this buying decision has actually been applauded in many aviation circles.
    Qantas was once the innovator, not any more though, hence a gradually decreasing marketshare of international flights to-from Australia. It doesn’t help that Qantas seems to be at war with its’ staff most of the time.

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