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.
“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.”