[Kurt A]

Boeing pays competitor Airbus via Qantas for delay

Jetstar will request Qantas directors accept a $200 million deal today, which will enable the budget brand to lease a fleet of Airbus jetliners, paid for by the compensation demanded from Boeing.

The board meeting has the cost of acquiring new planes on the agenda, as well as the financial reparations to be received from Boeing after the delays in delivering the 787 Dreamliner.

The directors will also consider an overhauled frequent flyer plan.

The most significant focus for the directors will relate to filling a gap in aircraft capacity, resulting from the third delay in delivery of the new Boeing jet, which is now 15 months behind schedule.

Business Day reports that Qantas sources anticipate the amount to be in excess of the $200 million that Airbus paid to Qantas following the two year delay of the first A380.

Although numbers have not been admitted, a senior airline source informed Business Day, “if you look at the size of the Boeing order against the 12 planes that Airbus delayed you get some idea of how much Boeing will have to pay.”

The delay in delivery has already breached the multimillion dollar contract where Qantas had placed firm orders for 65 Dreamliners and options for a further 50.

Qantas could still renege unscathed, due to the breach, but has clarified that it remains confidence that the fuel efficient Dreamliner will be beneficial and profitable for Jetstar.

The new route plans for Jetstar will be delayed by at least six months, and hence Boeing is expected to compensate for the loss of potential earning and the fact Jetstar will lose the opportunity to be the first discount airline operating certain routes into Asia.

The leasing agreement is necessary for Jetstar to preserve their market share and attract passengers for their expansion plans into Europe.

Jetstar fears that without the new planes, they’ll “be behind the eight-ball when Air AsiaX launches cheap flights from Australia to Europe,” a Qantas senior divulged to Business Day.

Air AsiaX has already announced the plans for cheap flights to London, using their Airbus A350s, but Jetstar will have a limited range with A330s, and will only just reach Athens or Rome.

-eTravel