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Steve Creedy
02 October, 2019
Qantas boss Alan Joyce wants to get another 10 years out of the airline’s refurbished Airbus A380s and says the move to bring the superjumbo's product into line other aircraft in the fleet will help him do it.
Inspecting the first refurbished aircraft for the first time in Sydney yesterday, Joyce said the international fleet would have a consistent product across its fleet for the first time by the time it celebrated its centenary next year.
READ: Analyst tips Boeing will launch the 797.
Despite moves by some airlines to retire 380s, the Qantas experts have done their sums and Joyce argues a new configuration with a 27 percent increase in premium seating will help keep them in the air.
The airline is replacing its aging A380 business class seats with its well-regarded next-generation Business Suite and has boosted the number of seats in this class from 64 to 70.
It’s all-premium upper deck now has 60 premium economy seats, up from 35 in the old layout, and features the same seats as its Boeing 787s.
A welcome change is that the premium economy cabin now has two dedicated toilets and business class has four. Previously they shared facilities.
Another big development is a lounge with seating designed for socializing and that offers a range of drinks and between-meal snacks and drinks.
Snacks range from marinated olives to a selection of cheese, a roasted vegetarian tart and beef koftas.
Business class is darker than on the 787s and the lounge is dark and intimate.
Designer David Caon in the new Qantas A380 business class. Photo: Steve Creedy
"We just wanted to create a more sophisticated mood,'' said designer David Caon.
"As we started to work various palettes ... this one was the one that seemed to make the most sense in terms of creating that sophisticated feel."
Caon said many of the flights were night flights and he loved the idea of meeting up with a friend for a drink in a different setting.
"On an aircraft, you do get a lot of those lighter finishes, they're the ones that are typically selected in a lot of different spaces,'' he said. "We wanted to experiment with something that was a little bit more interesting and textual."
The lounge features seating for 10 on deep green leather seating with wood-paneled walls and will be available to first and business passengers.
First class and economy have both been refreshed with new cushioning and fabrics and first-class customers get a bigger video screen.
The way to go if you have the dough: the refreshed Qantas A380 first class. Photo: Steve Creedy
Joyce is pleased with the result and says the design team led by Caon delivered a better design than was originally envisaged when he first saw it as a virtual reality display.
“I think our customers are going to love it,’’ he said at the unveiling. “We’ve had these aircraft now for 10 years, we want to have them for the full life going through to 20 years.
“We know that the product in the 787s and 330s is getting an amazing reaction from customers.
“And having the A380s behind … was something we needed to fix.”
While noting the airline loves its efficient twin-engine Boeing 787s, Joyce said the double-decker A380 still has a place in the Qantas fleet and there are still routes where it can do better.
He pointed to Los Angeles, where the scheduling window requires bigger aircraft, as well as slot-constrained destinations in Asia such as Shanghai and Tokyo Haneda.
“We’d like to fly the A380 to Haneda one day, we still have to work through that, but that is a market where we think there’ a role of the 380,’’ he said.
“We’re not going to get a lot more slots into those markets so you need to have the bigger aircraft to make money on them.”
There were also longer routes such as the Qantas flights to Dallas-Fort Worth where the A380 also worked.
Joyce said a detailed analysis had concluded a fleet of 12 A380s was right for Qantas and routes such as Perth-London, where the load factor is 95 percent in premium cabins, showed money could be made out of good premium content.
A look at unsatisfied demand led the airline to believe the 27 percent increase in premium seats was needed and would work.
Qantas boss says new A380 configuration will help boost revenue per flight. Photo: Steve Creedy
That unsatisfied demand included companies that would not pay for business class but wanted something better than economy, retirees that wanted extra comfort on long-distance flights as well as high-income individuals.
“It meets a market demand that we’ve just seen growing over the years,’’ he said.
“So we think this combination of what we’re doing on the aircraft will improve our revenue per flight quite considerably and that improves the economics of the 380s and allows us to justify the business case to keep them longer.”
Asked about the impact of a decision to lower interest rates in Australia on the dollar and income of retirees, Joyce said the airline still saw people spending money on experiences.
He also believed the move by the Reserve Bank of Australia to cut rates to historic lows. combined with other stimuli in the economy, would produce benefits such as homeowners having more disposable income.
However, he agreed that a lower Australian dollar stemming from the cuts would impact the airline in several ways.
The Qantas boss said a lower Aussie dollar was positive on revenue out of the US, where Qantas had a large proportion of its sales in the Pacific, but negative out of Australia with people less likely to go to the US.
he said the group was already seeing that in Hawaii and Jetstar had moved some capacity to Bali.
The airline also bought fuel in US dollars, which was why its hedging program was important, and the cost had a negative impact on the group.
Overall, however, he saw an exchange rate where the Australia dollar was worth somewhere in the low 70 US cents range as the ideal spot for Qantas.
“If it gets in the 50s, we buy aircraft in US dollars (and) that’s a big negative since we’re spending a lot of money on aircraft.
“We don’t like it too low, we don’t like it too high either.”
However, he believed the RBA decision was a positive one.
The Qantas boss said the airline group was still seeing weaknesses in some segments but growth in others.
The resource sector was very strong but there was a weakness in telecommunications and infrastructure travel and weakness in price-sensitive leisure travel had not improved after the election, he said.
Qantas boss Alan Joyce wants to get another 10 years out of the airline’s refurbished Airbus A380s and says the move to bring the superjumbo's product into line other aircraft in the fleet will help him do it.
Inspecting the first refurbished aircraft for the first time in Sydney yesterday, Joyce said the international fleet would have a consistent product across its fleet for the first time by the time it celebrated its centenary next year.
READ: Analyst tips Boeing will launch the 797.
Despite moves by some airlines to retire 380s, the Qantas experts have done their sums and Joyce argues a new configuration with a 27 percent increase in premium seating will help keep them in the air.
The airline is replacing its aging A380 business class seats with its well-regarded next-generation Business Suite and has boosted the number of seats in this class from 64 to 70.
It’s all-premium upper deck now has 60 premium economy seats, up from 35 in the old layout, and features the same seats as its Boeing 787s.
A welcome change is that the premium economy cabin now has two dedicated toilets and business class has four. Previously they shared facilities.
Another big development is a lounge with seating designed for socializing and that offers a range of drinks and between-meal snacks and drinks.
Snacks range from marinated olives to a selection of cheese, a roasted vegetarian tart and beef koftas.
Business class is darker than on the 787s and the lounge is dark and intimate.
Designer David Caon in the new Qantas A380 business class. Photo: Steve Creedy
"We just wanted to create a more sophisticated mood,'' said designer David Caon.
"As we started to work various palettes ... this one was the one that seemed to make the most sense in terms of creating that sophisticated feel."
Caon said many of the flights were night flights and he loved the idea of meeting up with a friend for a drink in a different setting.
"On an aircraft, you do get a lot of those lighter finishes, they're the ones that are typically selected in a lot of different spaces,'' he said. "We wanted to experiment with something that was a little bit more interesting and textual."
The lounge features seating for 10 on deep green leather seating with wood-paneled walls and will be available to first and business passengers.
First class and economy have both been refreshed with new cushioning and fabrics and first-class customers get a bigger video screen.
The way to go if you have the dough: the refreshed Qantas A380 first class. Photo: Steve Creedy
Joyce is pleased with the result and says the design team led by Caon delivered a better design than was originally envisaged when he first saw it as a virtual reality display.
“I think our customers are going to love it,’’ he said at the unveiling. “We’ve had these aircraft now for 10 years, we want to have them for the full life going through to 20 years.
“We know that the product in the 787s and 330s is getting an amazing reaction from customers.
“And having the A380s behind … was something we needed to fix.”
While noting the airline loves its efficient twin-engine Boeing 787s, Joyce said the double-decker A380 still has a place in the Qantas fleet and there are still routes where it can do better.
He pointed to Los Angeles, where the scheduling window requires bigger aircraft, as well as slot-constrained destinations in Asia such as Shanghai and Tokyo Haneda.
“We’d like to fly the A380 to Haneda one day, we still have to work through that, but that is a market where we think there’ a role of the 380,’’ he said.
“We’re not going to get a lot more slots into those markets so you need to have the bigger aircraft to make money on them.”
There were also longer routes such as the Qantas flights to Dallas-Fort Worth where the A380 also worked.
Joyce said a detailed analysis had concluded a fleet of 12 A380s was right for Qantas and routes such as Perth-London, where the load factor is 95 percent in premium cabins, showed money could be made out of good premium content.
A look at unsatisfied demand led the airline to believe the 27 percent increase in premium seats was needed and would work.
Qantas boss says new A380 configuration will help boost revenue per flight. Photo: Steve Creedy
That unsatisfied demand included companies that would not pay for business class but wanted something better than economy, retirees that wanted extra comfort on long-distance flights as well as high-income individuals.
“It meets a market demand that we’ve just seen growing over the years,’’ he said.
“So we think this combination of what we’re doing on the aircraft will improve our revenue per flight quite considerably and that improves the economics of the 380s and allows us to justify the business case to keep them longer.”
Asked about the impact of a decision to lower interest rates in Australia on the dollar and income of retirees, Joyce said the airline still saw people spending money on experiences.
He also believed the move by the Reserve Bank of Australia to cut rates to historic lows. combined with other stimuli in the economy, would produce benefits such as homeowners having more disposable income.
However, he agreed that a lower Australian dollar stemming from the cuts would impact the airline in several ways.
The Qantas boss said a lower Aussie dollar was positive on revenue out of the US, where Qantas had a large proportion of its sales in the Pacific, but negative out of Australia with people less likely to go to the US.
he said the group was already seeing that in Hawaii and Jetstar had moved some capacity to Bali.
The airline also bought fuel in US dollars, which was why its hedging program was important, and the cost had a negative impact on the group.
Overall, however, he saw an exchange rate where the Australia dollar was worth somewhere in the low 70 US cents range as the ideal spot for Qantas.
“If it gets in the 50s, we buy aircraft in US dollars (and) that’s a big negative since we’re spending a lot of money on aircraft.
“We don’t like it too low, we don’t like it too high either.”
However, he believed the RBA decision was a positive one.
The Qantas boss said the airline group was still seeing weaknesses in some segments but growth in others.
The resource sector was very strong but there was a weakness in telecommunications and infrastructure travel and weakness in price-sensitive leisure travel had not improved after the election, he said.
