Print

Mail

wiki links

Qantas orders 23 Airbus A320s

Chief executive for Qantas Geoff Dixon, right, and chief executive of its new domestic offshoot Jetstar, Alan Joyce, left, announce the birth of the airline at a press conference in Sydney, yesterday. The new airline will operate a fleet of A320 aircraft. PHOTO: AFP

Qantas Airways Ltd, Australia's biggest airline, ordered 23 Airbus SAS A320 aircraft for its new Jetstar discount carrier, extending the European manufacturer's lead over Boeing Co with a purchase valued at US$1.15 billion.

Jetstar, to be based in Melbourne, will start services in May with 14 Boeing 717 planes, Qantas said in a statement to the Australian Stock Exchange.

The service will expand in June with the delivery of the first of the US$50 million, single-aisle Airbus planes, which can carry each 150 passengers.

"We have gone to Airbus because we very much like the A320," Qantas' chief executive Geoff Dixon told reporters in Sydney. "It was a very, very aggressive tendering process and we are very pleased with the outcome and the price we are paying for the aircraft."

Airbus will deliver 300 planes planned for this year, which will put it ahead of Chicago-based Boeing for the first time to become the world's biggest commercial aircraft maker.

The order by Qantas for the so-called narrow body aircraft helps Airbus expand sales to a carrier that used to operate an all-Boeing fleet.

Qantas acquired the 23 new Airbus planes for about US$50 million each, chief financial officer Peter Gregg said. The planes will be fully fitted with leather seats, Qantas said.

Jetstar, a low cost carrier, will bolster demand by as much as 20 percent and is likely to have a "small" loss in its first year of operation, Dixon said in Sydney. Qantas will spend A$100 million (US$72.5 million) on start-up costs, not including the purchase of new planes, Dixon said.

"I am very confident that this airline will be the lowest cost airline in Australia," Dixon said. "If we have the lowest cost base in this particular entity, we have an opportunity to set fare levels in some markets. We will be the price setters at both ends of the market."

The carrier will compete with Richard Branson's Virgin Blue, which has about 30 percent of Australia's domestic market after three years of operation.

Brisbane, Australia-based Virgin Blue has a fleet of 40 Boeing aircraft and last month ordered five more Boeing 737 planes.

Virgin Blue, which Branson started with A$10 million, is raising as much as A$558 million in an initial share sale to help fund its expansion.

The stock will begin trading next Monday.
This story has been viewed 1674 times.