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Qantas to rethink aircraft orders: CEO

7-Jun-2011 11:03 AM

Qantas CEO Alan Joyce warned the airline may adjust aircraft orders and delivery dates unless it can get a decent return on capital from its loss-making mainline international operations (The Australian/The Australian Financial Review, 07-Jun-2011). Speaking from the sidelines of the IATA AGM in Singapore, Mr Joyce said the airline would not keep spending on the international business until it began returning its cost of capital. "We have to review the capital we are putting into it because the business is not performing, it's clear, and there are other parts of the business that are," Mr Joyce said. A380 and B787 deliveries will not be affected by any new fleet decisions. Qantas is about to reconfigure several A380s and increase seating capacity to 490 or 450, which is expected to take up to a year to complete. Configurations on older B747-400 equipment will also be changed, with first-class cabins taken out and replaced with more premium economy seating. Mr Joyce also said the airline would be working with alliance partners American Airlines, LAN Chile and British Airways to improve route structures and boost productivity as part of negotiations with unions. Mr Joyce said that Qantas would use Malaysia Airlines’ entry to oneworld as a springboard to increase capacity into Asia and win back market share.

Qantas: “We’re not going to add any more capital to the international business until it starts returning its cost of capital, and we have to review the capital we are putting into it because the business is not performing … There are other parts of the business that are giving us a better return on the cost of capital, that's where we should be putting the expenditure, and international is not going to see any more growth until it's turned around." Alan Joyce CEO. Source: The Australian Financial Review, 07-Jun-2011.

Qantas: “It’s a great opportunity for Qantas to recapture market share in Asia. The thing that oneworld has done for us [in the past] is to open up markets that wouldn’t otherwise work.” Alan Joyce, CEO. Source: The Australian Financial Review, 07-Jun-2011.