Australian flag carrier Qantas has shelved its plan to launch a series of new record-breaking nonstop routes and will review its international fleet due to the COVID-19 pandemic and its impact on air travel.
Dubbed ‘Project Sunrise’, the carrier intended to connect Australia’s east coast cities to London, Paris and New York using modified Airbus A350-1000 aircraft. The move to suspend the project is a blow for the airline, which had already invested significant resources into proving the concept by conducting three research flights last year.
Alan Joyce, Qantas Group CEO told Executive Traveller that the time was “not right” to continue with the project, “given the impact that COVID-19 has had on world travel.”
He added: “But we do think there's still a good business case for it, and a good opportunity.”
In December, after a detailed evaluation of the Boeing 777X and Airbus A350, the airline selected the A350-1000 as its chosen platform for the ultra long-haul flights. While no orders had yet been placed, the suspension of the project will be disappointing for the European aircraft manufacturer which would have been in line to receive an order of up to 12 examples.
From the outset, Qantas has been keen to stress that Project Sunrise would only go ahead if there was a business case for it. In a December statement, Joyce remarked: “We’ll only commit to this investment if we know it will generate the right return for our shareholders given the inherent commercial risks.”
The news came as the Australian giant announced its quarterly trading results, in which it outlined its financial position and strategy for weathering the COVID-19 crisis. The statement revealed that Qantas has raised a further AU$550m in funding against three of its wholly owned Boeing 787-9 aircraft. This follows the $1.05bn it raised in March, secured against seven more of the same type.
The company’s net debt now stands at $5.8bn. It also detailed that it has unencumbered aircraft assets worth $2.7bn which it says it can raise funds against if required. Qantas, which states it has sufficient resources to keep it going until at least December 2021, expects to reach a cash burn rate of $40m per week by June.
As for its international fleet review, the airline said that it was reviewing the situation with its long-haul fleet. The carrier’s four Boeing 747s, which are due to be retired at the end of the year, may not return to the skies before their scheduled exit date.
Joyce told Executive Weekly that the likelihood was, they would not be coming back. He added: “There’s still the possibility, if there was the demand for it.”
In the spotlight are Qantas’ 12 Airbus A380s. The carrier recently completed a cabin upgrade on six of its 12 examples and has put a halt on refitting the remaining aircraft to save cash. The operator said it was “keeping our options open” when considering whether all 12 would re-enter service.