Qantas picks Airbus for world’s longest flights

A passenger stands in front of a window where Qantas planes are parked at Melbourne Airport, Australia. (Reuters/File)
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Updated 14 December 2019

Qantas picks Airbus for world’s longest flights

  • Airline could order up to 12 planes

SYDNEY: Australia’s Qantas Airways picked Airbus over Boeing  as the preferred supplier for jets capable of the world’s longest commercial flights from Sydney to London, dealing the US planemaker its latest setback this year.

The choice of up to 12 A350-1000 planes fitted with an extra fuel tank for flights of up to 21 hours cements Airbus as the leader in ultra-long haul flying at a time when Boeing is battling delays on its rival 777X programme and a crisis following two deadly 737 MAX crashes.

The Qantas flights would begin in the first half of 2023, but remain subject to the airline reaching a pay deal with pilots, who would need to extend their duty times to around 23 hours to account for potential delays and switch between flying the A350 and the airline’s current A330 fleet. A final decision on an order is expected in March, the airline said on Friday.

Qantas CEO Alan Joyce said the airline “had a lot of confidence” in the market for non-stop services from Sydney to London and to New York based on two years of flying non-stop from Perth to London, where it has achieved a 30 percent fare premium over one-stop rivals in premium classes.

“The A350 is a fantastic aircraft and the deal on the table with Airbus gives us the best possible combination of commercial terms, fuel efficiency, operating cost and customer experience,” he said.

Singapore Airlines Ltd operates the world’s current longest flight, nearly 19 hours from Singapore to New York, using an ultra-long range version of the smaller A350-900.

Airbus Chief Commercial Officer Christian Scherer thanked Qantas for its selection in a statement, while a Boeing spokesman said it was disappointed with the decision but looked forward to continuing its longstanding partnership with the airline.

Rico Merkert, a transport professor at the University of Sydney Business School, said the A350-1000 was “a much safer bet” given Boeing had recently reported problems such as the grounding of the 737 MAX, structural cracks in 737 NGs and a fuselage split in a stress test of its 777-9.

Airbus no longer provides list prices for aircraft, but based on its 2018 price list, the Qantas order could be worth up to $4.4 billion before heavy discounts that are standard for airline customers.

Citi estimated on Friday the planes would cost A$3 billion ($2.04 billion) to $3.5 billion, with the investment likely to be phased over three years.

Barclays sees $2 per barrel impact to oil prices as coronavirus fears threaten demand

Updated 9 min 31 sec ago

Barclays sees $2 per barrel impact to oil prices as coronavirus fears threaten demand

  • More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China
  • Barclays expects the OPEC and other allies to step in and take further measures to keep the markets tight

BENGALURU: Barclays said on Tuesday oil prices will be impacted by $2 per barrel on the potential economic fallout from the coronavirus outbreak in China.
More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China, leading authorities to increase preventive measures, impose travel restrictions and also extend the Lunar New Year holidays to limit the spread of the virus.
The bank sees a $2 per barrel downside to their full-year Brent and WTI forecasts of $62 per barrel and $57 per barrel, respectively.
Compounding the effects of the spillover to economic growth from China and the region, Barclays expects transitory oil demand erosion of about 0.6-0.8 million barrels per day (mb/d) in the first quarter of this year, or 0.2 mb/d for the full year.
“If air passenger traffic in China declined by half in first quarter of 2020, it would likely lead to a 300,000 barrels per day year on year decline in jet-kerosene demand from China,” the bank said adding the fall in road transport would likely be less severe than in the past given reduced reliance on buses.
Barclays expects the Organization of the Petroleum Exporting Countries and other allies to step in and take further measures to keep the markets tight, in case the fall in demand is more acute.
Oil prices have been down for the last six sessions, but the bank said that the market reaction was likely overdone.
Barclays said the actual economic fallout from the coronavirus could be less severe than the 2003 SARS outbreak, given that the new virus seems less lethal than SARS so far and the measures taken by Chinese authorities.
The bank said the geopolitical risks to global supplies remain high as US-Iran tensions could continue to gradually escalate and oil production in Libya could fall further if the blockade of key infrastructure facilities continues.
Brent crude prices are currently trading around $59 per barrel and US WTI at around at $53 per barrel.