Brisbane wins two new US routes but will Qantas grow its Brisbane 787 base?

Qantas Airways has unveiled plans to launch services from Brisbane to Chicago and San Francisco following tentative approval of its proposed joint venture with American Airlines. The new routes will boost Qantas’ Brisbane network from one to three North American destinations but will likely not require any expansion in Qantas’ widebody fleet.


Highlights:

  • Qantas Airways has announced plans to launch Brisbane-Chicago and Brisbane-San Francisco contingent on final US DOT approval of its joint venture with American Airlines;
  • The DOT granted tentative approval to the JV in early June, paving the way for three new Australia-US routes; Melbourne-Dallas will likely be the third route but has not yet been announced;
  • Qantas could potentially launch the two new Brisbane-US routes using its existing Brisbane 787-9 base; a reduction of Brisbane-Los Angeles is likely.

The Australian flag carrier announced on 4-Jun-2019 that Chicago and San Francisco will be launched contingent on the US Department of Transportation’s final approval of its JV with American. Qantas and American had promised as part of the JV application, which secured tentative US DOT approval last week, to launch at least three new routes within the first two years of commencing a joint Australia-US operation.

Qantas initially flagged four potential new US routes from Brisbane – Chicago, Dallas, San Francisco and Seattle. In an Oct-2017 analysis report, The Blue Swan Daily concluded that Seattle was the most unlikely of the proposed new routes: “Qantas supposedly will select the US airport that provides the best deal but given the relative grim prospects of a Brisbane-Seattle route the talk about Seattle seems to be more a negotiating ploy than a serious option.”

SEE RELATED REPORT: Brisbane to Seattle? You got to be kidding!

San Francisco is sensible as it is the third largest US destination from Brisbane after Los Angeles and New York. Qantas already serves Brisbane-Los Angeles (along with Virgin Australia) and also offers one-stop service from Brisbane to New York via Los Angeles. Qantas is looking at Sydney-New York as part of its evaluation of new ultra long-haul aircraft but Brisbane-New York nonstop is not under consideration.

Chicago is also sensible because while it is a smaller local market from Brisbane it is (unlike Seattle) an American hub. Qantas will be able to leverage this to offer connections throughout the Midwest and Eastern US. Boston, Miami, Orlando, Washington DC are all among the top 10 US destinations from Brisbane that are not served nonstop.

Dallas is also an American hub and the Brisbane-Dallas market is similar in size to Brisbane-Chicago in terms of local passenger traffic. American could launch Brisbane-Dallas but Melbourne-Dallas is likely more appealing. A second Australia-Dallas route to supplement Qantas’ Sydney-Dallas service is expected to become the third (not yet announced) route for the new American-Qantas JV.

While securing new routes to Chicago and San Francisco is a huge accomplishment for Brisbane Airport and Queensland tourism, Qantas could potentially launch the new services without expanding its Brisbane Boeing 787 base. Qantas started basing four new 787-9s in Brisbane in 4Q2017 and 1Q2018, replacing 747-400s as the airline closed its Brisbane 747 base.

The four Brisbane based 787-9s are used mainly for Los Angeles. Qantas currently has 10 weekly flights from Brisbane to Los Angeles; seven continue to New York and three turn around at Los Angeles. The equivalent of roughly one aircraft is also used for Hong Kong on a Brisbane-Hong Kong-Sydney rotation. Qantas operates a mix 787-9s and A330s on Brisbane-Hong Kong and Sydney-Hong Kong but Sydney does not yet have a 787 base. Qantas’ other 787 base is Melbourne, where there are four aircraft deployed to Los Angeles, San Francisco and London via Perth.

Qantas has another six 787-9s on order for delivery in late 2019 and 2020. These 787-9s are slated to replace its remaining eight 747-400s, which are all based in Sydney and are currently deployed to Honolulu, Johannesburg, Santiago, San Francisco and Tokyo Haneda. As The Blue Swan Daily recently reported, Sydney-San Francisco will be the first of these routes to transition to 787-9s (in Dec-2019).

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While Qantas may not base all six additional 787-9s in Sydney this seems likely given the size of its Sydney 747 operation. Brisbane-Chicago and Brisbane-San Francisco could therefore be launched by reducing Brisbane-Los Angeles and transitioning the Hong Kong 787 flights to A330s.

Qantas increased Brisbane-Los Angeles from seven to 10 weekly flights to offset the loss in capacity as it downgauged the route from 747-400s to 787-9s. However, it will not need as much Brisbane-Los Angeles capacity following the launch of Chicago and San Francisco because Brisbane-Los Angeles passengers that now continue to Chicago or San Francisco can start using the new nonstop option.

A large portion of passengers heading to other points in North America can also transit in Chicago and San Francisco instead of Los Angeles. In a similar scenario, Qantas reduced Sydney-Los Angeles frequencies after resuming Sydney-San Francisco in late 2015.

Qantas has not stated how many flights it will operate on either new Brisbane route but three or four frequencies are likely, making it feasible to use the existing Brisbane based 787 fleet (with adjustments to Los Angeles and Hong Kong). While Brisbane may not enjoy the economic benefits associated with a larger 787 base, the network benefits of two new US routes (and potentially a third if American launches Brisbane-Dallas) are still noteworthy.