Qantas's long haul fleet capacity: how much of an impact did the pandemic have?
Qantas's long haul fleet capacity: how much of an impact did the pandemic have?
The COVID-19 pandemic resulted in the most significant shock to the global airline industry in history. The near total shutdown of air travel led to airlines taking dramatic action to reduce flying and an uncertain recovery led to many airlines placing large numbers of aircraft in storage, accelerating retirements and delaying new deliveries. Carriers in different countries faced idiosyncratic conditions with border closures, immigration formalities and financial support varying significantly. This led to demand returning in an erratic and fragmented manner in late 2022.
Like most airlines, Qantas took significant action to reduce its long haul fleet. A narrative has emerged that it’s now suffering from an acute shortage of capacity. Not only due to pandemic related actions but also an underinvestment in capacity in the preceding years. This analysis intends to inform this debate by conducting a thorough analysis of Qantas’s long haul fleet availability in the pandemic’s aftermath.
It doesn’t analyse and critique fleet strategy - that is a discussion for another time - rather focusing instead on availability, taking a data driven approach to analyse the impact of aircraft retirements, storage, return to service, heavy maintenance and refurbishments.
The analysis summarises data from an original dataset we generated using ADS-B data and verified with secondary sources. Developing the dataset was intensive and required a manual examination of each aircraft’s history. This analysis focuses on presenting the data and allowing you to draw your own conclusions, while also leaving the door open to follow-up analyses on specific questions.
Qantas’s fleet: before, during and after
In early Feb 20, Qantas began reducing its long haul flight schedule in response to the emerging COVID-19 pandemic after suspending flights to mainland China on 9 Feb, followed by reductions to Hong Kong and Singapore on 20 Feb. The pandemic evolved rapidly and on 10 Mar, Qantas reduced capacity to Japan, Europe and the US. This coincided with the first actions to reduce the fleet placing 8x A380s into storage, leaving just 2x flying (2x were undergoing cabin refurbishment). Further reductions were announced on 17 Mar leaving most of the fleet idle. In the coming months, more aircraft were stored with the remaining aircraft operating on reduced schedules.
Since the pandemic, Qantas’s fleet has experienced a net decline of 4 aircraft as 9 were retired and 5 were added to the fleet (3x new B787-9s and 2x wet-leased A330-300s). Retirements included 2x A380s (scrapped), 2x A330-200s (converted into freighters) and the final 5x B747-400s. While some consider the -400s a permanent casualty of the pandemic, their retirement was long planned and brought forward by only 6 months.
The decline in aircraft has been compounded by a reduction in average aircraft size. While the A330-200s have been replaced by larger A330-300s, the A380s and B747-400s have been replaced by smaller B787-9s. This has resulted in an 11% decline in total seat capacity across the fleet despite a 7% decline in fleet size!
How have Qantas made up the capacity shortfall?
Data from our Capacity Tracker shows Qantas’s international capacity was 8% and 5% lower than the pre-pandemic period (12 and 6 months to Jun 24 compared to Jun 19). Qantas have limited the impact on actual seat capacity by increased use of domestically configured A330-200s on long haul routes by reducing their use on domestic and Tasman flights. We analysed this in Apr 24 (see link below).
Qantas have also relied on Jetstar to cover capacity. Jetstar have replaced nearly all B787-8 flying to Bali with new A321LRs allowing the redeployment of B787s on longer sectors to Asia. Once again, we analysed this in Jan 24 (see link below).
Jetstar’s international capacity was 20% and 27% higher than before the pandemic (12 and 6 months to Jun 24 compared to Jun 19). When combined, group level capacity was up 0.4% and 4% over the last 12 and 6 months. This is impressive when considering total market capacity of all carriers combined is down 7% and 3% down over the same periods.
Storage, return to service and maintenance
Aircraft are made to fly! To avoid damage from the elements aircraft are typically stored in dry climates and key components are covered. Aircraft are placed in a specialised maintenance program instead of its usual line and base maintenance (A- and B-checks). Before returning to service they require a specialised return to service check and any outstanding heavy maintenance (C- and D-checks that are typically undertaken every 2 and 6 years, respectively).
Qantas has faced difficulty returning aircraft to service, complicated by challenges with heavy maintenance and refurbishments. In some cases, return to service checks required C- and D-checks that came due or were delayed while in storage, thereby concentrating the heavy maintenance cycle compared to normal operations. This was exacerbated by global supply chain challenges in the aftermath of the pandemic. We’re not only referring to the challenges in global logistics in 2022, but also systematic challenges that aircraft and engine manufacturers have faced.
Some have speculated that Qantas underestimated the pace at which demand would return and wasn’t sufficiently prepared to return aircraft as rapidly as required, however this is beyond the scope of this analysis.
But let’s consider what the data says about storage …
By Apr 20, Qantas had placed 60% of its fleet in storage, including all A380s, 62% of A330s, but just 21% of the B787s. By Jul, 91% of B787s had been placed in storage, increasing the fleet-wide total to 77%. The B787s weren’t placed into long term storage facilities like the A380s but were simply inactive at bases in Australia.
77% of the fleet remained in storage through Sep. In Oct, the B787s began returning and all were back in service by Apr 21. The A330s began returning in Dec 20 with nearly all back in service by Oct 21 (only 8% remaining in storage). The A380s were the slowest to return with the whole fleet remaining in storage until Dec 21.
How did we estimate this?
In order to analyse fleet availability we need to define how we’ll measure it. We focused on tracking the number of days available for each aircraft against the number of days it was in the fleet during a particular period. For example, Mar 21 has 31 days so we counted how many of the 31 days an aircraft was stored, in heavy maintenance (C- or D-checks) or undergoing refurbishment (e.g. A380 cabin refits, A330 internet installation). The remaining days are available to fly.
Line maintenance (A- or B-checks) and unplanned maintenance aren’t counted as unavailable since these are part of normal operations. Fleet scheduling should include sufficient slack to account for both. Availability was also adjusted to account for the date on which aircraft are retired or delivered.
The analysis distinguishes between storage and heavy maintenance as this is a particular point of interest. This is easier said than done! When both occur at the same location it can be difficult to determine when an aircraft left storage or began heavy maintenance. This doesn’t affect measurement of total availably, just the breakdown between storage and maintenance.
What about heavy maintenance …
At present, 7% of the fleet is in heavy maintenance (Aug 24). This metric has varied significantly over the last few years, particularly by fleet type. Peaks of 12% were reached in Jun 22 and Sep 23, but has also been as low as 5% in Feb 23 indicating a degree of cyclicality.
The B787s have a different trajectory to the rest of the fleet. As a young fleet none were due for D-checks since 2020. The B787s are among a new generation of aircraft that are follow a different maintenance program. D-check are due at 12 rather than 6 year intervals as many tasks are subsumed into a greater variety of C-checks. This can also result in C-checks varying more in time.
Maintenance unavailability of B787s is only due to C-checks. 11 of 14 received C-checks since Apr 20 (new deliveries haven’t received their first C-checks). Unavailability appears more erratic than other fleet types, reaching 14% in Oct 21 and 9% in Feb 23, but 0% in 18 of 33 months since Dec 21. This is likely due to the relatively smaller fleet (compared to A330s) and planning to ensure maximum availability during peak times.
Qantas have 28x A330s across several sub-fleets. Two sub-fleets of the smaller A330-200 (8x “domestic”; 8x “international”) and two of the larger A330-300 (10x standard Qantas configuration; 2x wet-leased Finnair aircraft). The fleet has a wide age range which has implications for maintenance cycles:
A330-200 (domestic): Half are approximately 15 or 16 years old, while the other half are 21 years old. All received their last D-checks before the pandemic.
A330-200 (international): Between 11 and 14 years old. All received fresh D-checks in the post pandemic period, significantly affecting their availability (1x, 4x, 2x and 1x in 21, 22, 23 and 24, respectively). Also undergoing wifi installation taking aircraft out of service for several weeks at a time.
A330-300 (Qantas sub-fleet): 18 to 20 years old. All received fresh D-checks in the post pandemic period, significantly affecting their availability (1x, 5x, 1x and 3x in 20, 21, 22 and 23, respectively).
The A380s have been the most challenging fleet for Qantas. All aircraft were stored and complicating matters was that the fleet was part way through a D-check cycle and cabin refurbishments at the onset of the pandemic. Work that was underway was completed, however further D-checks and cabin refurbishments were paused while aircraft were in storage. This likely reflects uncertainty as to whether the A380 fleet would return at all. While Qantas announced that only 2x A380s would be retired, the A380 fleet was effectively written off in FY20 with a $1 billion impairment charge.
As the A380s returned to service they were hit by a perfect storm. In addition to global supply chain constraints that affected cabin refurbishments they have been beset by long waiting times for and length of D-checks. This is not unique to Qantas and has affected most, if not all A380 operator worldwide, with several causes.
There are a limited number of MROs that conduct heavy maintenance on A380s. Due to idiosyncrasies in the timing of A380 deliveries more than a decade ago there have been a large number coming due for D-checks in a relatively concentrated period, becoming even more concentrated as many airlines delayed D-checks during the pandemic. This created a surge in demand for D-checks in 22 and 23, made worse when Etihad and Qatar chose to return their A380s after previously announcing their retirement.
Most A380 operators have struggled to return aircraft to service, including Emirates (92/116 active), Lufthansa (6/8) and Singapore Airlines (9/12). On the other hand, British Airways (11/12) and Qatar (7/8) have most active. Emirates, Lufthansa, Singapore and Qantas have had large numbers of A380s hitting D-check intervals in recent years whereas BA and Qatar will reach their next intervals in a few years time as their fleets are somewhat younger.
D-checks and refurbishments have taken longer than normal. For example, D-checks on VH-OQI and OQJ took more than 4 months each despite neither undergoing a cabin refurbishment. OQK and OQL have been undergoing D-checks for more than 6 months (only OQL is undergoing refurbishment). As of Aug 24, 9 of 10 aircraft have returned to service. Only VH-OCQ has not flown since the pandemic (it is somewhat of an enigma). 3x received D-checks prior to the pandemic, 4x received fresh D-checks in 22 and 23, with the remaining three in Abu Dhabi, either undergoing or awaiting D-checks. During the presentation of FY24 financial results in Aug 24, Qantas noted that they expect 8x A380s operating by the end of 2024, and all 10 by the end of 2025. We interpret this to mean that OQK will return shortly but that OQL and OQC will only return in the new year.
The net result is that anywhere between 10% and 30% of the A380 fleet has been in maintenance since they began returning to service. In addition to D-checks this also accounts for C-checks (e.g. 4x have received C-checks in Abu Dhabi in 2024).
Fleet availability: combining storage and maintenance
When combined, the effect of storage and heavy maintenance limited aircraft availability in the aftermath of the pandemic. This was particularly problematic as heavy maintenance cycles became unusually concentrated and airlines struggled with supply chain challenges. The data shows how returns from storage were partially offset by increased unavailability due to heavy maintenance.
Rather than present the data in terms of unavailability, we now refocus it and consider how much of the was available to fly. This isn’t only affected by by storage and maintenance, but also by the delivery of new and wet-leased aircraft. So what does the data show?
In Apr 20, only 40% of the fleet was available (560/1410 flying days available) as much of the fleet had already entered storage. This declined further to 23% between Jul and Sep 20 but increased rapidly as the B787s and A330s returned to service reaching 71% availability in Dec 21 (1037/1457).
At this point no A380s had returned to service. They began their (slow) return to service in the following month (Jan 22), coinciding with a slowing of capacity returns. 80% was achieved in Dec 22 (1171/1457) and 90% in Dec 23 (1428/1581). You may note that the denominator had increased in Dec 23 due to the delivery of 3x new B787s between Apr and Jul, and a wet-leased A330 in Oct. In the most recent month, availability stands at 91% (1466/1612) (another wet-leased A330 delivered in Mar 24).
The recovery has been led by consistently increasing availability of the A330s and B787s, supported by new aircraft deliveries and the completion of the A330 D-check cycle. The A330-200 domestic fleet was the most affected by storage but recovered consistently, while the A330-200 international and A330-300 fleets all underwent D-checks.
The A380 has held Qantas back with knock-on effects across the fleet as other aircraft had to cover A380 routes. While they have increased their contribution since 2022 they have lagged other fleet types. Comparative, only 60% is presently available compared to 100% on the A330-200 domestic, A330-300 and B787 fleets and 92% on the A330-200 international.
What does the future hold?
What the challenges of the last few years obscure is how Qantas have gone through a period of unusually concentrated heavy maintenance. However, fleet availability is likely to remain consistently high as the concentrated series of heavy maintenance nears completion with no significant heavy maintenance cycles in the coming years.
The next round of D-checks that will come due are the domestic A330-200s in 2026 and 2027. The four younger aircraft are likely to undergo these checks, however the four older aircraft are likely to be retired. This coincides with the start of deliveries of new B787s and A350s (excluding Project Sunrise aircraft). As recent history has shown, delivery dates are unpredictable and delays likely. Delays would generate considerable challenges for Qantas and is something to keep a close eye on. No other D-checks will be required before 2028.
Fleet availability should even grow in the next year as the final A380s return to service. This lends itself to speculation: what will Qantas do with this this capacity? This isn’t the purpose of this analysis, but to spark some debate, we thought about some pragmatic short term measures:
Build redundancy: The fleet has been worked hard in recent years, possibly even being over scheduled at times. Limited slack has resulted in significant disruptions and knock-on delays resulting from a single IROPs event. This has been particularly problematic with the B787 fleet. For example, Sep 24 has seen multiple cancellations to/from the US due to the unplanned unavailability of one aircraft (VH-ZNC was damaged on 24 Aug and has been unavailable since).
B787 reconfiguration: The retirement of the B747s and shortage of A380s led to a reconfiguration of the network. Historic B747 routes like SYD-JNB/SCL/SFO and A380 routes like MEL-LAX were taken over by the B787. This has meant routes previously operated by the B787 being switched to the A330 (e.g. BNE-LAX). As A380s return some B787 flying will return to A380. For example, SYD-JNB will switch to the A380 at the end of this month allowing redeployment of the B787. It is likely BNE-LAX will return to the B787 sooner rather than later.
There are more questions than answers though as this will not account for all the returning A380s. So where will Qantas deploy them? Historic A380 routes, particularly to the US may not be the best destination for that capacity at present. As we have noted several times in recent months, the US market has remained weak as a result of the strong US Dollar. Qantas has performed admirably taking a pragmatic approach to returning capacity to the US. In 2019 they operated nearly 3x daily A380 flights to the US, however given market trends it’s hard to see Qantas returning to that anytime soon.
So where do they send it? Your guess is as good as ours! And just how much scope does Qantas have? That’s a seperate question altogether and one we’ll return to in the coming weeks!
Thanks for reading! As we noted in the introduction, this post is a platform for future debate on Qantas’s fleet strategy, capacity evolution and its impact on network strategy. In some respects, it’s a resource for that debate.