Qantas Delays Two A380 Deliveries

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Published: May 4, 2012

Australian carrier Qantas is delaying delivery of two Airbus A380s by 3-4 years to help cut capital spending by AUD$ 400 million (USD$ 411 million).

Delivery of the two A380s, originally intended for early 2013, will be put back to 2016-17, with a final six A380s delivered from 2018-19, Qantas said on Friday.

Qantas said in February it would cut capital spending by AUD$ 500 million over two years and announced plans to cut 500 jobs after its first-half profit halved as an industrial dispute and higher fuel bills took their toll.

The additional AUD$ 400 million announced on Friday will take capital expenditure cuts to AUD$ 900 million. Capital expenditure will now total AUD$ 1.9 billion, the company said.

NO ETS CONNECTION

In a decision that some see as putting further pressure on Airbus, a Qantas spokesman said the delay in the delivery of the A380s was unrelated to the EU emissions charges.

“It’s purely to reduce capital expenditure. We’re obviously participating in the EU emissions trading scheme but we are already fully compliant with it, so unlike Chinese airlines and US airlines we have no intention of objecting to the EU ETS,” he said.

Airbus earlier this year said China had blocked the purchase of 35 long-haul A330s and 10 A380 superjumbos and suspended the purchase of 10 more A330s, as tensions over the EU’s Emission Trading Scheme (ETS) continue.

Airbus has seen USD$ 14 billion worth of aircraft caught up in tensions over the scheme, which has also angered countries such as India and the United States.

Qantas has 12 Airbus A380s and 26 Boeing 747s in service and would continue to work with both plane makers to service their requirements, he added.

“We have a good relationship with both manufacturers, we’ve got big orders with both, we have the big Airbus A320 order and we have big orders with Boeing for the 737s and the Dreamliner.”

CAPACITY INCREASE

Qantas also said it will increase capacity on its more profitable domestic routes during 2012 and 2013.

It will add additional services during peak times on core east-coast business routes and reintroduce Boeing 747 and Airbus A330 services on the east-west route. Jetstar will increase capacity in key leisure markets.

Qantas chief executive Alan Joyce said its goal was to retain domestic market share at around 65 percent.

Earlier this month, media reported Qantas’ heavy maintenance bases were under review and said Qantas would cut 400 jobs at its base near Melbourne airport, with 660 workers at another base also at risk.

Qantas said the consultation process had concluded and a decision will be announced by mid-May.

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