What to expect from Qantas and Jetstar in 2025?
Enjoying the steady state, while preparing for the future
Following on from last week’s review of Virgin, we take a look at Qantas and Jetstar. Once again, happy new year and thanks for your support and encouragement over the last year. We look forward to a productive and successful year ahead!
Other than the continuation of the media pile-on, we don’t expect too much excitement from Qantas and Jetstar in the year ahead. They’ve made big moves in recent years with three big orders that has already begun to radically change the group’s route network and operational strategy.
December 2021: Ordered 20x A321XLR and 20x A220-300 to begin replacement of B737-800 and B717-200s (options for 94 more aircraft across A320 and A220 families). A220 deliveries have commenced with 5x already in service and 1st A321XLR expected in April 2025.
May 2022: Ordered 12x A350-1000s for Project Sunrise with the 1st aircraft now slated for delivery in late 2026.
August 2023: Ordered 24 more widebodies (12x A350-1000, 4x B787-9 and 10x B787-10) due for delivery from 2027, ostensibly to replace the A330s.
This will gain momentum in 2025, as more narrowbody aircraft will be delivered and start to give us a better picture of how the group intent to utilise them, however too few will be delivered to entirely set the scene. The widebody aircraft will only begin to be delivered in 2026 and 2027, nevertheless, we are already seeing Qantas make moves in preparation in anticipation. Let’s look in more detail …
Mainline narrowbody deliveries
The A220s were ordered to replace the B717s at QantasLink, however the retirement of the B717s were accelerated and temporarily back-filled with wet-leased E190s from Alliance Airlines. 5x A220s are already in service, with 2 more expected by June and 11 more in FY26 (July 2025 to June 2026). It won’t be until late 2026 that the A220 fleet reaches 20 aircraft and thus fully replaces the B717s. Notably, Qantas have at least 24x A220s on order meaning the final fleet will be at least 29 aircraft. This flexibility provides opportunities for growth, or alternatively replace some B737-800s.
The 1st A321XLR is expected in April 2025 and a 2nd before June, with 7 more in FY26. At present, Qantas have 28x XLR on order with options for 94 aircraft (across the A320 and A220 families). The XLRs have been ordered to replace Qantas’s large B737-800 fleet, amounting to 75 aircraft. The B737s vary in age with the youngest just 10 years old and the oldest 23 years old. The initial XLRs will replace the older aircraft as they approach their 4th D-checks in the coming year.
The XLR is a misunderstood aircraft with many commentators expecting every airline to announce new long haul routes to be flown by the XLR. As we have argued elsewhere (here, here and here), the XLR is a more capable version of the LR, carrying its larger fuel load more efficiently by giving up less volumetric space. As a stretched version of the A320, the baseline A321 carries more passengers with the same structure and fuel load meaning payload limitations on longer sectors. The LR made up for this by carrying more fuel and a marginally increased MTOW but carried that fuel in the hold, restricting volumetric space for cargo and bags. The XLR’s innovative RCT carries that fuel yet gives up less space, with a further increase in MTOW.
Qantas won’t be flying the XLR on long haul routes, at least anytime soon. Instead, we expect to see it on the triangle, transcontinental routes to/from Perth, and trans Tasman routes. Most importantly, it’ll fly transcontinental without the payload restrictions that the baseline A321 would encounter while simultaneously integrating into shorter sectors on the triangle, maximising utilisation. However, don’t expect a rapid roll-out with only a handful of XLRs in service by the end of 2025. And even as the pace of deliveries pick-up in the coming years, the A321 XLR and B737-800 will operate alongside each other for about a decade!
A more important short term focus will be the A220s as the fleet gains scale during the year. With more than 10 likely to be in service by the end of the year sufficient scale will be achieved to see greater redundancy leading to improved reliability. However, crew shortages at National Jet Systems (Qantas subsidiary that operate the A220s) are rumoured to be a more significant reliability constraint. We’re already seeing the A220s doing more than its predecessor with its deployment on Darwin-Singapore from March, however most A220 capacity will be utilised to as replacement rather than expansion capacity.
What to expect: A321 XLR rollout will give us a glimpse of which routes the XLR will operate as they are introduced alongside the B737-800s. A220 fleet to reach scale and (hopefully) find its way onto many new routes.
Qantas and Jetstar long haul developments
On the long haul side, the international wifi roll-out on the A330-200s has been delayed with switch-on only expected towards the end of January 2025 due to a technical problem with the Viasat satellite. The installation of hardware has been going ahead as planned on A330-200s, and will begin on the B787-9 and A380s once the A330-200s are complete. Still no word on the A330-300s but their long term future in the fleet is doubtful with retirement likely beginning in 2027.
Tokyo Haneda consolidation
2025 promised some interesting route developments, first of which is the Tokyo pivot that’ll see Qantas consolidated their Tokyo operations at Haneda (supposedly) at the end of February. At present, Qantas operates 4x daily flights to/from Tokyo: 2x daily Sydney-Haneda flights and 1x daily Melbourne-Narita and 1x Brisbane-Narita. This is in additional to Jetstar’s flights from Brisbane, Cairns and Sydney to Narita and Osaka.
Recall that following Virgin’s cancellation of Cairns-Haneda, the IASC reallocated Australia’s 3rd Haneda frequency to Qantas. While Qantas confirmed the configuration and timing (1x daily from each of Brisbane, Melbourne and Sydney) in their IASC application a lot could still change as the new flights haven’t been loaded in the schedule yet. It’s likely that they’re working to retime some awkward slots at Haneda. Furthermore, no confirmation yet if reconfiguration will result in the loss of a daily Tokyo frequency recalling that there are presently 4x daily Qantas Tokyo flights as one Sydney flight was cannibalised for the new services.
Qantas-Jetstar route switches
There will be some Qantas-Jetstar route switches in the coming year. First up if Jetstar increasing Sydney-Seoul from 4x weekly to daily in May, offsetting Qantas’s cancellation of the route that is currently operated 3x or 4x weekly. This is a further deepening of the market segmentation strategy that we described more extensively at Qantas’s FY24 financial results.
Meanwhile, fleet capacity constraints mean that Jetstar have to cut elsewhere to free up the B787 for Seoul. Specifically, they will cut Melbourne-Honolulu that will in turn be taken up by Qantas (3x weekly on A330). Qantas will now fly up to 10x weekly to Honolulu from Melbourne and Sydney, with Jetstar down to 3x weekly. This compares to NS19 where Jetstar flew 8-11x weekly and Qantas 5-6x weekly. Honolulu is a great example of market segmentation utilising the group’s flexibility and adaptability. This isn’t a static game with constant evolution of market dynamics and yields.
The elephant in the room (i.e. A380)
We recently saw the return of the 8th A380. One more will return in the 1st half of 2025, and the 10th and final A380 (hopefully) before the end of the year. The continued increases in A380 availability following the completion of heavy maintenance and refurbishment cycle will mean the return of the A380 to Sydney-Dallas on 4 of 7 weekly flights from August. This took us by surprise given the general sluggishness of the US market.
This will allow the redeployment of the B787-9 onto Brisbane-Los Angeles (on 3 of 7 weekly flights) and to increase Melbourne-Dallas from 3x to 4x weekly year round. Further A380 returns will enable BNE-LAX to return to daily B787. But this still leaves a lot of A380 flying on the table with a likely return of one daily A380 rotation into Asia (historically either Sydney-Hong Kong or Melbourne-Singapore). You might be wondering where the A330s will be reallocated to? At least one frame will become available (from Brisbane-Los Angeles), and even a 2nd or 3rd (if Tokyo indeed does go to 3x daily and when Brisbane-Los Angeles goes daily on B787-9).
This won’t immediately result in additional frequencies or new routes as the A330-200s will begin a refurbishment cycle from the middle of 2025. Economy class seats and entertainment will be upgraded, matching the new product on the Project Sunrise A350-1000s, although the business class seats will remain unchanged as they were previously upgraded to lie flats. Refurbishments should take a few months each and with the 1st aircraft expected to return to service before the end of 2025.
At this stage, only 10x A330-200s will receive the upgrades, leaving 6x in their old configurations. 4 of these 6 (EBA-D) are likely to be retired in 2 to 3 years prior to their 4th D-checks) and replaced by new B787s scheduled for delivery from 2027. The remaining 2x would only be due their 4th D-checks in 2028 or 2029 giving Qantas some flexibility.
Looking at the timelines, it seems as though more than one A330 will undergo refurbishment simultaneously, meaning not much scope for additional A330-200 long haul flying until the some have been completed at the end of 2025. But then where?
First up, Qantas told us last year that their plans for Perth include a return of Perth-Johannesburg and Perth-Auckland. This was initially penciled in for mid-2025, but that seems a little ambitious. Otherwise, we always seem to be taken up surprise with with new Asian city pairs (e.g. Brisbane-Manila) and additional frequencies to Singapore. However, our bet is on India with Qantas’s loads averaging 90% in the 12 months to September 2024.
What to expect: Further A380 returns will free up B787s to return to Brisbane-Los Angeles, opening up A330s for refurbishment. Maybe a little premature, but Perth-Joburg and Auckland may finally return, and our bet is for more India flying.
Jetstar developments
Less exciting but probably just as consequential, Jetstar will continue to receive new A320 and A321s in 2025. This includes 2x A321LRs by June, taking the fleet to to 19 (with 4 more in FY26) and 3x A320neo (taking the fleet to 5, however no more in FY26). The additional A321LRs will allow further expansion of Bali flying, although there are no more B787s to be displaced with the last B787 flight to Bali in December 2024. Additional Bali flying will come from the new capacity allocated utilising the enhanced regional package.
Jetstar big 2025 is the refurbishment of the B787s that are due to begin towards the end of the year. In additional to a cabin refresh, they’ll be equiped with crew rest enabling longer range deployments. While Jetstar themselves have speculated about flights as far afield as South Africa and Sri Lanka, we are less optomistic in the short term as the fleet is already fully utilised. Unless Qantas take back some Jetstar flying (e.g. Osaka or Seoul) or take the remaining Honolulu there simply isn’t scope.
Jetstar have already carried the burden of long haul capacity over the last few years for the group! As we described in last week’s “chart of the week”, it has been Jetstar’s 31.6% increase in ASKs between 2019 and 2024 that has enabled group level international capacity to finally surpass its 2019 levels despite mainline’s ASKs declining 7.3% during this time. However, the scope for this in 2025 is limited as there just isn’t enough new capacity coming online and no more B787 flying to be displaced. Furthermore, with the fleet likely to be one aircraft down from late 2025 for several years, Qantas may even have to take up some of the slack!
What to expect: Consolidating the fleet and capacity expansions, and the start of the B787 refresh!