Qantas to Buy 15 Boeings
Qantas Airways said Sunday it has chosen 15 Boeing Co. 737-800 aircraft over rival manufacturer Airbus’ A320s and taken options on 60 more planes as it boosts capacity to cope with heavy domestic demand.
The flagship carrier also inked a 10-year strategic alliance with AMR Corp.’s American Airlines, under which the two carriers would expand code-share agreements and Qantas would share Los Angeles terminal space with the world’s biggest airline.
Qantas, which dominates 85% of the $5-billion domestic Australian market since the demise of rival Ansett Australia, said the 15 new aircraft ordered were part of a $750-million upgrade announced earlier this month.
“The new aircraft will enable Qantas to meet the demand created by the collapse of Ansett Airlines and provide for growth in all sections of the Australian tourism industry,” Qantas said.
The first airplane will come into service in January.
The rest of the planes, which originated from existing orders placed by American Airlines, would be phased in from February to July 2002, Qantas said.
The airline recently raised $225 million through a share placement to help fund the purchase.
The options on 60 additional aircraft, 20 more than originally expected, would be used to gradually replace the existing 737-300 and 737-400 aircraft in Qantas’ core fleet of 111 Boeing planes.
Engines, which account for about a quarter of the value of each plane, would be provided by a joint venture of General Electric Co. and French state firm Snecma.
Neither Qantas nor Boeing would give details on discounts on the next-generation jets.
But aerospace analysts have suggested the discount could be in the region of 25% to 30% as airlines around the world shed capacity and put new orders on ice after the Sept. 11 air attacks on the United States.
“They were aggressive offers. In today’s world, after Sept. 11, things have slowed down a little bit,” Doug Groseclose, Boeing’s senior vice president of international sales, told Reuters.
“I’m sure both companies sharpened their pencils,” he said, adding the catalog price for the 15-plane order was around $910 million.
The U.S. aircraft manufacturer lost the lion’s share of Qantas’ $4.6-billion 10-year upgrade announced almost a year ago to archrival Airbus. Qantas placed orders in November 2000 with Airbus for 12 of its A380 superjumbos and 13 A330s and with Boeing for six of its longer-range 747-400s.
Shares of Chicago-based Boeing closed Friday up $1.78 at $37.68 on the New York Stock Exchange.
