Qantas Buys 110 Jet Planes From Airbus

October 11 00:00 2011

New York, October 11 ( – Qantas, the Australian airline major, has struck a deal with Airbus to buy 110 jets from the European manufacturer. This is the biggest deal ever by an Australian airline with a plane manufacturer. The deal is expected to cost a whopping $9.5 billion dollars.

Qantas airline obviously does not have reserves amounting to so much. The funding pattern of the transaction has not been disclosed. However speculations are rife that debt funding is the only way that Qantas can afford such a big deal.

Speculations were also rife about Qantas’s intention behind buying such a big fleet. But these speculations have been put to an end as Qantas has released information about the possible use of the aircrafts. Qantas is planning to set up a low cost airline in Asia in collaboration with two Japanese companies. The Japanese companies in question are the world renowned Mitsubishi Corp and Japan airlines. These plane complement the strategy of a low cost airline because they consume 15% less fuel than the usual planes. Jet fuel being a major component of the costs, this is supposed to reduce costs considerably.

Qantas is hopeful of the increasing potential of a low cost airline in Asia and is betting big on it, especially with the biggest ever jet purchase behind it.