Nice try, but back to the drawing board…So says Qantas, after rejecting initial bids from both Airbus and Boeing to service its new ultra-longhaul destinations.
Back in August, both Airbus and Boeing submitted their “best and final” offers to Qantas. Qantas is looking for an aircraft that can economically service London and New York nonstop from Sydney. It has dubbed this mission “Project Sunrise” and hopes to begin flights in 2023.
For Boeing, that meant a specially-modified 777-8X. For Airbus, an A350-100ULR. But after submitting their offers, Qantas has now declined both offers.
At an investor briefing in Sydney this morning, Qantas International CEO Tino La Spina explained that the numbers still did not work:
We’ve asked them to go back and re-look at that, to sharpen their pencils, because there still was a gap there. So we’re eagerly awaiting to see what we get back from that.
Learning from the 737MAX tragedy and other problems Qantas has had with both its Airbus and Boeing aircraft, it wants more than just a good price. It also wants a strong warranty and contractual protections for unintended scenarios, like a long-term grounding.
This aircraft is going to be in the fleet for the next 20 years and we want to cover off eventualities … making sure that it’s future-proofed.
Qantas CEO Plays “Underpromise, Overdeliver” Card
I always get a kick out of Qantas CEO Alan Joyce downplaying the possibility of Project Sunrise. After a successful nonstop run from London to Sydney last week (with 50 passengers onboard), Joyce said:
We have to get the premium from our customers … we have to get in the position where the manufacturers contribute their contribution, we have to get the regulator on side and we have to get the pilots on side.
I have no problem… in saying ‘we gave it a good try but it didn’t work’.
It’s true that pilots have to be onboard for this and Australian regulators won’t just rubber stamp such extended duty hours for flight attendants and pilots. But it seems like every time he is interviewed he downplays the chances of Project Sunrise.
The technology is nearly there. Pilots won’t turn down the opportunity to take on two New York to Sydney trips a month instead of three from Los Angeles or Dallas. Thus, the only question is whether customers will buy it. Based upon the very-popular London to Perth service, one of the most profitable in the system, I’d say nonstop flights from London and New York to Sydney are all but inevitable.
CONCLUSION
Airbus and Boeing have been asked to sharpen their offers to Qantas. While part of this is just the great pageantry of an aircraft acquisition project, this one is special; this one is for the record books. The question may come down to who wants to lose money more for this high-status order, Airbus or Boeing?
image: Qantas
If I had to fly JFK-SYD, I wouldn’t mind stopping in LAX or SFO. If I had to fly LHR-SYD, I wouldn’t mind stopping in PER or SIN. However, I do like SIN to LAX/SFO/SEA non-stop. It’s possibly a matter of perception and also the arrival and departure times.
I think another thing he may be looking at is how will a direct Syd to lhr effect the Perth to lhr flights economically? Sure, it’s killing it right now, but once there is something from Sydney…
You have to be a hero to have just one name .. 🙁 .. !!
It seems that somehow you didn’t believe that Boeing and Airbus has the best offer and technologies to offer. Then again, evidently, 737Max has thought that precaution is better judgement than faking procedure and design… Not even FAA can be trusted. Lol.
One. Trick. Pony.
Looks like Alan Joyce is gonna squeeze Airbus and Boeing for every penny, pound, and pence. I almost feel sorry for whoever the winner is. Reminds me of the winner’s curse tendency in economics/auctions. Fortunately, Airbus is busy enough they don’t need to kill themselves to win the order. Boeing has suffered from a paucity of orders lately, so maybe they feel the need for a marquee sale and associated PR more than actual profit.
Whoever the winner is, they’re not making money on this plane. no way theyre going to turn a profit to build a plane only one airline wants and maybe only 20 of those planes tops. there’s little incentive except prestige here.