Qantas boss Alan Joyce hails decision to order planes during Covid as airline looks for growth

The Qantas chief has hailed the ‘phenomenal decision’ to order aircraft during the pandemic as the airline defends criticism of its ageing fleet amid the exit of a 23-year old Boeing 717.

Qantas chief Alan Joyce has hailed the “phenomenal decision” to place a huge aircraft order at the height of the Covid pandemic, saying it has the airline well positioned for the future.

Mr Joyce was speaking at Sydney Airport, where he and fellow executives farewelled a 23-year-old Boeing 717 and showed off two new additions to the Qantas Group’s fleet.

The event appeared designed to counter criticism of Qantas’ ageing fleet and suggestions incoming CEO Vanessa Hudson would face a “mountain of capex” to pay for new aircraft.

The 717 was the first aircraft of its type registered with the Qantas Group in 2001, and operated Jetstar’s inaugural flight from Melbourne to Launceston in May 2004.

More recently, the aircraft flew with QantasLink which was preparing to take delivery of new A220s later this year to replace the 717s.

Mr Joyce said a North American carrier was buying all 20 717s for an undisclosed sum.

“They’re worth some money and are being sold,” said Mr Joyce.

“It’s great that Qantas’s aircraft, because of how well they’re maintained and how well they’re operated, that they’re seen as having an alternative use by other airlines.”

New A220s would replace the 20 717s, with the first to be delivered from Airbus later this year.

Qantas also showed off a recently arrived Boeing 787-9 which would soon be joined by two other Dreamliners, adding more capacity to the airline’s international network.

A Boeing 717 in Jetstar livery. Now flying for QantasLink, the jet is one of 20 717s being farewelled by the airline group after being sold to a North American carrier. Picture: Qantas

Mr Joyce said Qantas and Jetstar had 299 aircraft on order over the next decade which would mean a more versatile and fuel efficient fleet.

“Qantas took a big advantage by in the middle of Covid, being one of the only airlines to commit to new aircraft,” he said.

“That order now looks like a phenomenal decision because Boeing and Airbus are both saying they have supply chain issues and it’s very hard to get new aircraft. We got them at very good prices because we made the order in the middle of Covid.”

With the airline on track for a full year profit of close to $2.5bn, Mr Joyce said Qantas was well placed to afford the aircraft and “invest in our customers, and invest in low airfares”.

His comments followed concerns raised by analysts that incoming CEO Vanessa Hudson would face a “mountain of capex” to update the Qantas fleet, which has an average age of 15-years.

Mr Joyce was joined by Jetstar CEO Stephanie Tully who was expecting two more new A321neos by the year’s end, taking the total number to nine.

Ms Tully said the narrowbody jets had a much longer range than existing A320s, allowing Jetstar to use them on flights into southeast Asia and New Zealand as well as domestically.

The extra metal would also help Jetstar address performance issues, with the A321neos boasting a 99.8 per cent mechanical reliability rate, she added.

“We haven’t been up to scratch and we admit that and we’re doing a lot of work to make it better,” said Ms Tully, in relation to woeful on-time performance and high cancellation rates.

“There’s been a lot of issues including unique supply issues (but) fixing operational performance has been my priority, and I’m confident in the next six months you’ll see a lot of change at Jetstar.”

The last of QantasLink’s 717s was due to exit the company by next July, by which time the group should have taken delivery of 12 A220s.

Mr Joyce said any shortfall in capacity would be made up by Embraer E190 jets wet-leased from Alliance.

He confirmed Qantas was still keen to take over the smaller Alliance, despite the Australian Competition and Consumer Commission’s opposition to the $614m deal.

“We’re still reviewing our options,” he said with regards to legal action.

“We think Alliance is a good investment. We think it’s a huge benefit to customers (in the fly-in, fly-out sector) and we’re talking to our customers about that.”

Qantas was also set to publicly support the “yes” vote in the upcoming Indigenous voice referendum but was not yet ready to say how.

There had been suggestions the airline could paint the word “yes” on its aircraft livery as a show of support. Mr Joyce said there were still announcements to make about that.