Qantas ramps up long-haul push

QANTAS Airways has asked Boeing and Airbus to improve on their “best offers” to provide ultra-long-haul jets as the airline continues talks with pilots on flying such routes.

The aircraft being considered for the proposed flights between Australia’s east coast and cities such as New York and London include Boeing’s 777X-8 and Airbus’s A350-1000.

Speaking at a briefing for investors yesterday, Qantas chief Alan Joyce said the two aircraft manufacturers had been asked to “sharpen their pencils”, but not just on price.

“We want them to look at guarantees, at the ‘what ifs’,” said Mr Joyce. “This aircraft is going to be in the fleet for the next 20 years — we want to make sure it’s futureproofed.”

Qantas is looking at the ultra-long-haul routes as part of what it calls Project Sunrise.

Asked about negotiations with pilots for a new agreement to fly the routes, Mr Joyce said they had the most to gain from Project Sunrise.

“Growth in the international business brings promotional opportunities, and a promotion is the biggest pay rise they will get in their careers,” Mr Joyce said.

The prevailing enterprise bargaining agreement with pilots “doesn’t contemplate doing missions beyond 20 hours so we need a new agreement”, he said.

Mr Joyce said if the business case for the Project Sunrise flights did not stack up, there were other “growth opportunities we could spend that capital on”.

“If we can’t make this business case work, we’ll leverage the Emirates partnership and the American Airlines’ partnership and in some ways that’s lower capital,” he said.

“But if this does work, and we can get everyone to pull together, are we going to go for it? Of course. But we will be hard-nosed about it.”

Qantas last month reported a 1.8 per cent increase in group revenue for the three months to September, compared with the same period last year. But it came as domestic revenue dipped, as demand at budget offshoot Jetstar eased.

Margins at Australian airlines have been squeezed by fuel costs and weakness in consumer spending, as well as falling business confidence as economic growth falters.