Qantas picks Airbus for long-haul flights

Qantas has selected Airbus over Boeing as the preferred aircraft supplier for its planned ultra long-haul flights.

Preferred – the Airbus A350

Qantas has named Airbus as its preferred supplier for Project Sunrise flights but will not lodge an order until a final decision is made on the ultra-long-range services in March next year.

The selection of the Airbus A350-1000 over Boeing’s 777X-8 is another blow for the US manufacturer which has seen its order book flounder in the wake of the 737 Max grounding.

Qantas Group CEO Alan Joyce had planned to rule on the Project Sunrise business case by the end of this year but ongoing negotiations with pilots convinced him to push back the final decision.

He said the choice of the Airbus A350-1000 over the Boeing 777X followed an offer by the European manufacturer to add an extra fuel tank to the aircraft, and extend the deadline to lock in an order by a month.

Mr Joyce said the A350 was a “fantastic aircraft” and all going to plan, Qantas would order 12 of the aeroplanes with deliveries to begin in 2023.

“The deal on the table with Airbus gives us the best possible combination of commercial terms, fuel efficiency, operating cost and commercial experience,” Mr Joyce said.

“The aircraft and (Rolls-Royce Trent XWB) engine combination is next generation technology but it’s thoroughly proven after more than two years in service. This is the right choice for the Sunrise missions and it also has the right economics to do other long-haul routes if we want to.”

Qantas revealed pilots had been offered 3 per cent annual pay rises but the airline was seeking efficiency gains to lower operating costs on routes such as Sydney-London and Brisbane-New York. Pilots would also be expected to operate A330s as well as the A350s.

Australian and International Pilots Association president Mark Sedgwick said his members were looking for outcomes that benefited “both pilots and Qantas”.

“Pilot gave 30 per cent productivity improvements for the acquisition of 787-9 aircraft in 2015,” said Mr Sedgwick.

“So far in this negotiation we have not yet struck that balance of outcomes so we continue to discuss matters with Qantas.”

Although AIPA welcomed the selection of an aircraft type, vice president Brad Hodson said the announcement that the Civil Aviation Safety Authority saw no regulatory obstacles to the ultra long range flights, was of concern.

“The lack of any public and transparent position from CASA on Project Sunrise flying makes an already complex negotiation more difficult particularly when it comes to fatigue and safety concerns,” Mr Hodson said.

READ MORE: Why Qantas is playing long game | Qantas to play tough on ‘Sunrise project’ pilots deal

Qantas has used brand new Boeing 787-9s for its three research flights, the last of which will take off from New York to fly non-stop to Sydney on Monday evening local time.

But the aeroplanes are not able to cover the distance with a full payload and there was doubt that Boeing’s 777X aircraft would be ready for the planned launch of Project Sunrise services in 2023.

Mr Joyce thanked Airbus and Boeing for the “tremendous effort” they’d put in to Project Sunrise.

“It was a tough choice between two very capable aircraft made even harder by innovation from both manufacturers to improve on what they had already spent years designing,” he said.

A Boeing spokesman said they were disappointed but respected Qantas’ decision.

Airbus chief commercial officer Christian Scherer said they were looking forward to working with Qantas and “making nonstop services between cities such as Sydney and London a reality”.

Citi analyst Jacob Cakarnis said the size of the planned order, at 12 aircraft, was significantly higher than expected and would increase the cost of the project to between $3bn and $3.5bn instead of an estimated $1.3bn to $1.5bn.

“We expect this investment is likely to be phased over three years with an initial fleet size of about five aircraft given the skew to two major routes,” Mr Cakarnis said.

But he questioned whether there was demand for other routes.

“Our analysis suggests that destinations beyond Sydney-New York and Sydney-London may not have adequate demand to support Qantas’ Project Sunrise ambitions,” he added.

“We await further information from Qantas as to how a larger Sunrise fleet will be utilised across markets.”

Mr Joyce has previously said he would expect passengers to pay a 30 per cent premium for the non-stop flights similar to fares paid for Perth-London services, which have been a huge success for Qantas.