Upon acquiring a dozen special Airbus planes, Qantas Airways plans to operate non-stop air travels from Sydney to London, costing higher rates in a multi-billion dollar wager that passengers will pay a high price to save four hours on the major route.
On Monday, Qantas shares rose as much as 5.5 % to their peak point since November, after the company announced that debt levels had reduced to pre-COVID levels faster than anticipated.
The flights, which will begin in late 2025, will use A350-1000 planes that have been specially equipped with extra premium seats and decreased total capacity to transport up to 238 passengers over a 20-hour journey - the world's longest non-stop commercial flight.
The loss-making airline said on Monday that a solid rebound in the home market and signs of progress in foreign flights following the worst of the COVID-19 crisis had provided it the option to invest heavily in its future.
Qantas expects to make a profit in the fiscal year that begins in July.
"We have witnessed enormous peak demands since the beginning of the calendar year," Qantas Chief Executive Alan Joyce told the media at Sydney Airport, where a Qantas-branded Airbus A350-1000 test aircraft flown in from France was housed in a hangar as a background for the news.
The A350-1000 contract was the result of a "Project Sunrise" challenge established for Airbus and competitor Boeing Co in 2017 to develop aircraft capable of surpassing records.
Airbus was chosen as the trusted partner in late 2019, however, due to financial difficulties during the COVID-19 outbreak, Qantas postponed placing an agreement for two years.
The aircraft to be used on the Sydney-London trips, according to Airbus Chief Commercial Officer Christian Scherer, will have more fuel storage than other A350-1000s now in service with other carriers.
Since the outbreak, when strict travel rules were implemented, Joyce claimed the demand for non-stop travel has increased.
He suggested that rising fuel prices may be offset by increasing tickets, as the airline has previously done on non-stop Perth-London routes.
Qantas stated in a market update that while it anticipates an inherent operating loss for the financial year ending June 30, 2022, the second half of the year will benefit from stronger domestic and foreign demand, with free cash flow expected to rise even more in the current quarter.
Project Sunrise, according to Qantas, has an internal rate of return of roughly 15%.
