Airbus, Boeing vie for Sydney-London jet contract from Qantas

Analysts say the route will be commercially viable for Qantas as long as the price of crude doesn’t cross $70 a barrel.

Airbus and Boeing have now the capability to manufacture aircrafts that can do non-stop commercial flights from Sydney to London, the “Holy Grail” for Australia’s Qantas Airways Ltd.

Aviation experts say, as long as the price of crude doesn’t cross the Rubicon, i.e. $70 a barrel, the 20-hour flight is financially viable and more importantly it can be realized within a short span of 5 years.

Airbus has increased the range of its A350-900ULR to 9,700 nautical miles (17,960 kms) from its earlier 8,700 nautical miles. Including headwinds, the Sydney-London flight is equivalent to 9,600 nautical miles.

“These aircraft, we think, are potentially real goers on these routes,” said Alan Joyce, CEO of Qantas. “You know from what they have done on other aircraft that Sydney-London and Melbourne-London has real possibility.”

For Qantas, the Sydney-London route could be an interesting since it can reduce flight time by 3 hours which will enable it to charge a premium for this route. It will also help it differentiate its product from the around two dozen other airlines plying the so-called Kangaroo route with stop-offs in Singapore, Dubai and Hong Kong.

Although the Sydney-London route accounts for only 13% of its international capacity, it carries the prestigious QF1 flight number and is thus important to its global brand.

Qantas could potentially pad up its margins by 20% for its non-stop Sydney-London flight since the route is likely to attract premium leisure and business travelers form whom time is of the essence, said Rico Merkert, a professor specializing in transport at the University of Sydney’s business school.

“It’s something that can be presented as a unique selling point for Qantas,” said Merkert.

London-Sidney route

Qantas is likely to operationalize the non-stop flights from Perth to London beginning from next year using its Boeing 787-9 Dreamliner. For this route, the jet will use the most advanced flight path modeling methods, will have fewer seats than usual, will use, and will reduce the weight in areas seemingly as minor as the dishes and forks.

The expected flying time will be a short 17 hours

“In terms of economics, much depends on fuel prices,” said Richard Aboulafia, an aerospace analyst at the Teal Group. “If they stay at $50 a barrel or less, it should be possible to keep costs reasonable. But as fuel goes up, the disadvantages of flying a very heavy plane begin to make ultra-long haul problematic.”

Qantas wants Airbus and Boeing to manufacturer jets for this route which have a seating capacity of at least 300. This will allow it to maximize its revenue potential and allow its fleet some flexibility.

“We think our airplane has the legs and the capability,” said Dinesh Keskar, Boeing’s Senior Vice President Sales Asia-Pacific and India. “If the 787-9 can do Perth-London, we think that when the 777-8 comes out in the 2021 timeframe we will have a lot more improvement in technology.”

Qantas has yet to formally launch a tender process for the route since it is waiting for the airplane manufacturers to finalise the specifications of their upcoming aircrafts.

Expect the first Sydney-London flights to take off sometime in 2022.


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