Qantas 787: New Fleet and New Direction

The introduction of the Boeing 787 will change the Qantas network structure. A380 Melbourne-Dubai-London flights will be replaced by a 787 Melbourne-Perth-London service. Here are my two takeaways from these changes:

Reduced exposure to ME3 competition - Qantas will not be competing with other carriers on this new route which will likely give some breathing space on fares. Meanwhile, Emirates is taking the space left by Qantas in the Melbourne international market. This may be a mistake because Qantas found this route unprofitable and Etihad is reducing its capacity by downsizing aircraft. Emirates is planning to increase its capacity on the Melbourne-Dubai route by upgrading a 777ER service to an A380 service. At the same time, Etihad is reducing capacity by downsizing aircraft and Qantas is pulling out of the market altogether. Is this really going to end well for Emirates? Emirates success on the routes aside pulling out of such a competitive market into one where it has a unique product will likely benefit Qantas. When the competition continues to add capacity onto routes yields suffer.

Increased Focus on Asia and the domestic network - A380's from the Melbourne-Dubai route are likely to be deployed in Asia. Qantas has effectively leveraged its domestic network to significantly grow passenger numbers from Asia. The domestic network gives the airline a unique advantage over the foreign carriers flying to Australia from the region. The A380 is also an ideal aircraft for constrained airports in the region due to its enormous passenger capacity and suitability for long haul flights. The poor cargo capacity of the aircraft relative to its size is less of an issue as cargo tonnages have been doing poorly recently. The A380 is ideal to grow Qantas's presence in the region.

Further Reading

Australian Aviation-Qantas Confirms Melbourne-Perth-London Boeing 787 flights

The Australian-Chinese Tourists Key to Qantas Growth in Domestic Market