Qantas to switch domestic fleet to Airbus in blow to Boeing
By Jamie Freed and Tim Hepher
SYDNEY (Reuters) - Australia's Qantas Airways Ltd said on Thursday it has chosen Airbus SE as the preferred supplier to replace its domestic fleet, switching away from Boeing Co in a major win for the European planemaker.
The airline said it had committed to buying 20 Airbus A321XLR planes and 20 A220-300 jets and had taken purchase options on another 94 aircraft, subject to board approval expected by June 2022.
Deliveries would start in mid-2023 and continue over the next 10 years to replace an ageing fleet of 75 Boeing 737s and 20 717s, Qantas said.
"This is a clear sign of our confidence in the future and we've locked in pricing ahead of what is likely to be a big uptick in demand for next-generation narrowbody aircraft," Qantas Chief Executive Alan Joyce said in a statement.
It caps a successful week for Airbus after Singapore Airlines on Wednesday agreed to launch the A350 freighter and the planemaker looks likely to seize a narrowbody order from KLM as early as Thursday, in what would be the second defection to Airbus in 24 hours.
The loss of the contract, first reported by Bloomberg News, is a blow to Boeing's 737 MAX, interrupting a strong run of sales since the jet was cleared for flight late last year following a safety ban.
Qantas has operated Boeing jets since 1959 and was once the world's only airline with an all 747 fleet. After the Airbus narrowbody win, the U.S. planemaker will now supply only its long-haul 787 Dreamliners.
"Although we are disappointed, we respect Qantas' decision and look forward to continuing our long-standing partnership," Boeing said in a statement.
Joyce said in October that Qantas expected to order more than 100 narrowbody and regional planes, with a preferred supplier to be chosen in December.
The airline's low-cost arm Jetstar already has an order for more than 100 Airbus A320neo family planes that will be combined with the new deal to give Qantas more flexibility and the need for fewer firm commitments.
Qantas plans to order Pratt & Whitney engines for the fresh batch of Airbus A320neo family planes, having bought rival CFM International engines from GE and Safran for the Jetstar order. Pratt will also supply the engines for the A220.
Vertical Research Partners analyst Rob Stallard said the Qantas deal was a sign that Airbus was more focused on building up its narrowbody backlog than raising prices even though it already has a higher market share than Boeing.
"From an Airbus perspective, this should also help convince sceptical suppliers of the business case for moving the A320 family (production) to 75 a month over time," he said.
Qantas is separately looking at A350 widebodies capable of the world's longest commercial flights from Sydney to London, with a decision expected next year.