Qantas to Cut First Class on Some Planes

Qantas Airlines, Australia's flag-carrier, announced today it would invest $400 million to change seats and inflight entertainment on nine Boeing 747-400 aircraft, and reconfigure its Airbus A380 fleet.

Nine 747-400 planes will be fitted with Qantas' A380 standard seats and inflight product, including a fully flat Skybed sleeper seat in Business, a Marc Newson-designed seat in Economy and on-demand inflight entertainment in all classes. More dramatically, the first-class cabins will be removed and Business seats installed in their place. The airline said in a statement that the three-class configuration will offer 359 seats (58 Business, 36 Premium Economy and 265 Economy), an increase of 52 seats overall.

Meanwhile, 12 A380s will continue to fly with a four-class configuration, including First class, but be refitted to reduce Business seating and increase Premium Economy and Economy seating. The remaining eight aircraft will be delivered from 2012 in a three-class configuration and with no First cabin. (A380 seat numbers are to be confirmed subject to discussions with Airbus and suppliers.)

Qantas CEO Alan Joyce said that First Class would remain available on A380 services where demand existed. "It is vital that we align this offering with forecast demand which is expected to be relatively slow compared to Business, Premium Economy and Economy," he said. "Our 14 A380 First suites will be offered on 12 aircraft and on daily services from Sydney and Melbourne to London via Singapore and Los Angeles."

Joyce said the changes were being made to respond to shifting travel trends across the globe. "Our assessment of longer term travel trends, which pre-dates the economic crisis, shows that international premium travel demand is changing," Joyce said. "These changes will ensure we remain competitive in terms of aircraft configuration, product and service and that we are better able to ensure capacity is more closely aligned with demand. They will also add the equivalent capacity of more than three B747-400s, ensuring we can support future growth while reducing the need to purchase additional aircraft."

The upgrade and reconfiguration program will commence at the end of 2011 and is scheduled for completion by the end of 2013. It will be funded through the combination of operating cash flows and pre-existing debt facilities. The majority of capital expenditure will take place in 2012.

Further details of the program, including where work will be undertaken, will be confirmed once contractual arrangements are finalized.