Qantas Orders Additional A380 Aircraft

Sydney, 29 October 2006

Qantas Airways announced today that it had placed firm orders for eight more Airbus A380s, the world’s largest passenger aircraft.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the order increased the airline’s commitment to the A380 to 20 aircraft, to be delivered between August 2008 and 2015.

Mr Dixon said the A380 was clearly the most suitable aircraft for Qantas to deploy on dense longhaul routes from Australia to the United States, the United Kingdom, Continental Europe and possibly the Middle East.

"Our decision to increase our order has been made after an extensive review of the recent problems at Airbus and the delivery schedule delays of the A380.

"We are convinced that these problems relate to industrialisation issues at Airbus and will be remedied, and in no way relate to the technical capacity of the A380.

"The A380 has breakthrough technology and everything we have seen reinforces our view that it is the best available aircraft for Qantas.

"It will provide unprecedented comfort and space, as well as meeting our payload and range requirements."

Mr Dixon said Qantas had made an original order for 12 A380s with options for a further 12 aircraft in 2000.

"We have negotiated an attractive ‘package’ to firm up an additional eight A380s. The package also includes an additional four A330-200 aircraft which will help Qantas mitigate capacity concerns associated with the delay of the airline’s first A380s.

"The four A330-200s will be delivered between December 2007 and December 2008."

Mr Dixon said the terms of the new contract provided, among other things, protection against any further delay in the A380 delivery schedule and slide rights in the event of changed circumstances.

He said the Qantas Board believed the new aircraft order gave the Qantas Group long term certainty of supply of the world’s most up to date aircraft.

"In parallel with the A380 order, we have a contract with Boeing for the supply from 2008 of up to 115 B787 new generation aircraft, which also have the very latest technology for aircraft in the 300 seater range.

"The Boeing 787 and the Airbus A380 both have up to 20 per cent lower operating costs than existing aircraft and will form the nucleus of the fleets out to 2015 for Qantas and our low cost airline Jetstar."

Mr Dixon said Qantas would use a combination of outright purchase and operating leases in acquiring the aircraft.

"All the costs of these new aircraft will be met by operating cash flows," he said.

Mr Dixon said Qantas had also decided to buy five more Boeing 737-800 aircraft for delivery from February 2008.

"The Boeing 737-800s will be used along with our existing 33 B737-800s in Australian domestic operations and will replace older B737-400s. The B737-400s will be sold, redeployed or converted to dedicated freighter aircraft."

The Qantas Airways Group has a fleet of 219 aircraft.

Issued by Qantas Corporate Communication (3498)