The on-going coronavirus pandemic has severely impacted airline companies across the world. One of the victims of the COVID-19 outbreak is the deal between Qantas Airways Limited and aircraft manufacturers.

Apparently, the grim pandemic scenario has prompted Qantas Airways Limited, Australia’s largest airline by fleet size, to temporarily walk away from a deal with Airbus SE and Boeing. The airline confirmed that it will not receive new jets from these companies during this pandemic.

As per reports, the move defers three Boeing 787s aircraft which were due to enter the airline fleet by the end of 2020 and eighteen Airbus A321neos which were expected to arrive in Jetstar livery by the year 2022. The airline did not announce a revised timeline for when these jets will arrive.

The COVID-19 pandemic has forced airline manufacturers across the world to halt their aircraft orders, prompting Boeing and Airbus to slow their production rate. Boeing has already removed 10 percent of its total global workforce including around 230 employees at its Melbourne-based factory.

According to sources, the airline is presently flying the equivalent of 1% of its international network and 5% of its pre-pandemic domestic network. Approximately 25,000 of its 30,000 employees have been on a desk during this time. The airline will avoid bills running to hundreds of millions by delaying deliveries of two A321neos and three Dreamliners.

The decision to put off the capital expenditure for new aircraft will help the airline to reduce its cash burn to USD40 million a week from the end of June. Alan Joyce, Chief Executive of Qantas said that the airline could sustain that burn rate till the end of 2020 even in less travel demand –after the airline secured USD 1.5 billion in fresh debt raised against the 10 Dreamliners Qantas has bought with cash over the last three years.

Source Credit - https://www.smh.com.au/business/companies/qantas-pauses-boeing-airbus-plane-deliveries-amid-covid-19-downturn-20200511-p54rsh.html