Qantas to switch domestic fleet to Airbus in blow to Boeing

Australian airline Qantas has announced that it will switch its domestic fleet of planes to Airbus from Boeing.

The deal is a major win for the European plane maker and a blow to its US-based arch-rival.

The company also said that it expects to make a loss of more than A$1.1bn (£590m; $788m) in the first half of its financial year.

Like the rest of the global aviation industry, Qantas has been hit hard by months of coronavirus lockdowns.

"This has been one of the worst halves of the entire pandemic, where most states had their borders closed and the majority of Australians were in lockdown. Domestically, our capacity fell to around 30 per cent of pre-Covid levels for several months," Qantas chief executive Alan Joyce said in a statement.

"We have significantly reduced our cost base which improves our ability to recover," he added.

The company also said it had boosted its coffers by selling land near Sydney Airport for $574m.

The airline said demand for domestic flights slowed in late November as the Omicron variant of Covid-19 emerged, although the situation was now starting to improve.

It also expects competition in the domestic travel market to intensify in the second half of the financial year as Australia's state borders open.

Looking to the future, the company announced that it had agreed to buy 40 Airbus jets, with the option to purchase another 94 aircraft.

"This is a long-term renewal plan with deliveries and payments spread over the next decade and beyond, but the similarly long lead time for aircraft orders means we need to make these decisions now," Mr Joyce said.

The deal is subject to approval by the company's board, which is expected by June next year after negotiations with pilots.

Deliveries of the new planes are due to start in mid-2023 and continue over the 10 years to replace the airline's ageing fleet of Boeing jets.

Qantas also said that the new planes would lower its carbon emissions.

The announcement by Qantas caps a good week for Airbus after Singapore Airlines on Wednesday signed a provisional deal to buy seven A350 freighters.