Qantas to launch two new Asia airlines

QANTAS Airways is planning to establish two new airlines based in Asia as part of a crucial revamp of its international operations. The move also involves a US$9 billion fleet upgrade and up to 1,000 job cuts.

The Australian flag carrier will launch a new, premium Asian airline, as well as a Japanese low-cost carrier, the latter through a joint venture between Japan Airlines and Qantas subsidiary Jetstar (TTG Asia e-Daily, July 1).

“To do nothing, or tinker around the edges, would only guarantee the end of Qantas International in our home Australian market,” said Qantas CEO, Alan Joyce, adding that the airline’s international operation cost base was around 20 percent higher than those of its major rivals.

Joyce did not elaborate on when the new premium airline would be launched, but did say it could be based in Kuala Lumpur or Singapore, and would not be majority-owned by Qantas. A source with direct knowledge of the plan told Reuters that China was also a possibility for its base of operations.

Qantas’ latest move has confirmed speculation that the carrier had been planning to establish an offshore operation in Asia, involving its pilots and engineers, to cut costs and unprofitable routes (TTG Asia e-Daily, May 18).

Previously, there was also a rumour that Qantas had applied for a Malaysian Air Operators certificate, which was denied at the time by the airline’s spokesperson, Olivia Wirth.

Meanwhile, as part of the revamp, up to 1,000 jobs at Qantas may be made redundant, while the airline’s international network will be altered significantly.

Qantas’ older planes will be retired, and between 106-110 new Airbus A320s (28-32 will be current-generation A320s; the rest will be A320neos) will be acquired for around US$9.4 billion.

Some of these new aircraft will be operated by Jetstar Japan and the new premium Asia-based airline.

Qantas has also delayed the delivery of its final six A380s for up to six years.

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