Qantas seeks foreign money to buy Boeing 777X or Airbus A350 jets
By David Flynn, January 5 2018
Qantas looks set to renew its push to lift a government-imposed limit on foreign ownership and drawing the dots between new long-range jets from Airbus or Boeing with the need for deep-pocketed overseas investors.
Qantas chairman Leigh Clifford says the Qantas Sale Act, which caps foreign ownership at 49% of shares, also limits the airline's ability to raise capital ahead for big-ticket projects such as eventually replacing the Airbus A380s.
"We haven't got a particular need at the moment, but at some stage we’re going to have to dramatically renew the fleet," Clifford told Fairfax Media.
"At some stage we’re going to have to replace the [Airbus] 380s ... and [CEO] Alan [Joyce] has talked of the challenge we’ve put out to Airbus and Boeing for long-range aircraft. Well, these don’t come cheaply."
The list price for the Boeing 777-8 jet averages around A$470 million, with the Airbus A350-900 listed from A$395 million, although airlines typically receive discounts of at least 40% on the showroom sticker.
Qantas is weighing up both jets to launch non-stop flights from Sydney, Melbourne and Brisbane to New York and London.
Read: Boeing pitches 777X to Qantas for non-stop London, NY flights
Qantas previously lobbied for changes to the Qantas Sale Act in 2014 as the airline faced brutal losses of around $250 million and was being challenged by Virgin Australia, which is not constrained by similar foreign ownership restrictions and is now almost 90% foreign-owned.
David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
Qantas - Qantas Frequent Flyer
01 Aug 2013
Total posts 24
Should be interesting to see what the outcome of this will be...Personally cant see the issue if Qantas has more foreign owner ship, would be funny in Etihad was one of the share buyers, Emirates wouldnt be at all happy..
Qantas - Qantas Frequent Flyer
13 Jul 2012
Total posts 118
Why would Etihad want to invest in Qantas?
Qantas - Qantas Frequent Flyer
21 Jan 2014
Total posts 320
Sounds good to me, that way we will have two foreign owned domestic carriers and the protected domestic skies policy of Australia can be scrapped, and the domestic market can be opened up fully to competition, would be great for Australia, in particular domestic tourism market..
Qantas - Qantas Frequent Flyer
08 Sep 2012
Total posts 236
For a country of 23 million or so, we already have 4 domestic carriers. Unless we want to see service and quality drop across the board, I don't think we can handle more competition that's financially sustainable.
07 Oct 2012
Total posts 1250
What is the protected domestic skies policy you mention? Australian International carriers have to be majority Australian owned. There is no restriction on foreign ownership of domestic carriers other than for Qantas.
Qantas - Qantas Frequent Flyer
11 Oct 2014
Total posts 688
Whilst I agree with your first and last sentences, the second cannot pass unnoticed. 'Australian International carriers have to be majority Australian owned'.
Unless, of course, if you consider Virgin Australia's tricky, somewhat convoluted, corporate-loophole structure of their business - which is some 80% plus .. foreign owned.
Qantas - Qantas Frequent Flyer
21 Jan 2014
Total posts 320
Cabotage equals protected domestic skies policy, it can be called many things but at the end of the day, its protecting a market from competition. The relaxing of cabotage push has not stopped, it has just not reported in the media, but the push from across North and Western Australia is very strong, and raised again this week in Darwin, many Northern politicians are keen to revisit the subject in light of success with maritime changes that are quite successful. The loudest opposition last time was Qantas, and of course Virgin the foreign owned airline, if Qantas was to become a foreign owned airline the govt would become quite deaf to its opposition also.
QF
11 Jul 2014
Total posts 1024
More smoke and mirrors, record loss followed by record profits followed by "we need foreign ownership to buy new jets" really. I believe you I believe you
23 Oct 2014
Total posts 239
More political posturing. Very predicable. Wolf that cries poor.
06 Jan 2018
Total posts 1
Ultra long haul capability is being hyped because it's technically impressive, but the reality is that it's only an appealing prospect to a certain segment of the audience for those routes. A c21 hour flight is not appealing or practical to many travellers, especially those with young families and those actually wanting a stopover.
Virgin Australia - Velocity Rewards
06 Sep 2012
Total posts 231
I agree, unless jets get faster and cut down travel time, ultra-long haul flights will only appeal to premium customers and travellers who really need to get from Point A to B as soon as possible. It will be really difficult for QF to justify high prices for Economy as most of the customers are price-sensitive. When SQ launched non-stop SIN-EWR flights in 2003 they had to shift from a mix of Business and Economy to full Business as they weren't getting justifiable loads in Economy class. Additionally, with oil prices gradually rising again it could better from a business point of view to shift to an all Business class and maximise revenue.
10 Dec 2017
Total posts 6
Qantas should opt for A380 Neos (when the time comes) and follow emirates' footstep in only operate two aircraft types (777 & 380) qantas in going to be all over the place with 787, 737, 747, 380, 330 and potentially 350s or 777
10 Dec 2017
Total posts 6
May i add the 787 carries LESS passengers than the a380 using half the fuel so technically there the similar efficeny
12 Dec 2012
Total posts 1031
Airbus aren't going to make a 380NEO. No one wants them.
The Qantas fleet is reducing in type. They've already removed the 767s and are reducing the 747s. The 737s will likely start being replaced in ~5 years, with some of the oldest in service almost 20 years old.
The 330s have another 8-10 years in them, and the 380s about 10-12 years.
Qantas Group has a large outstanding order for A320s, meant for Jetstar brands, but could also end up with QF mainline. The remaining 8 orders and 4 options for A380s could end up converted to more A320s or A350s.
13 Nov 2015
Total posts 49
Hope Qantas opts for the A350. Better yet would be to keep the A380 as it's a fantastic plane, quiet and especially in F tons of room. I don't think foreign ownership above 49 percent would be detrimental as additional laws could be enacted, e.g. no sale of the airline and the Australian government can override any potential decisions which would harm Qantas. Any buy in would be restricted as a investment. How many investors would go for that is questionable though. The long history of major airline failures: Swiss (rescued with a government loan before being sold off to Lufthansa), Hungarian flag carrier MALEV, dead; Alitalia still flying due to government cash injections; Air Berlin, finished; Mexicana, done; Varig, gone; Ansett, out; SAS, still wobbly financially and kept flying by the 3 governments; Austrian, sold to Lufthansa; Sabena Belgium flag carrier, bankrupted, brought back to life by Lufthansa as Brussels Air; Aer Lingus, kept in the air via the Irish state as largest shareholder until sold to IAG; Greece's Olympic Airlines long gone.
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