Qantas expands Australian cargo fleet to meet demand for online shopping

Qantas Airlines Boeing 787 Dreamliner to Fiumicino Leonardo da Vinci Airport on July 14, 2022

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Australia’s Qantas Airways said on Monday it would add six converted Airbus A321 freighters to its domestic fleet to replace five aging Boeing 737s and add capacity to meet rising demand from online shopping.

The A321 Freighters will be sourced from the open market and switched from carrying passengers to cargo, subject to commercial negotiations, the airline said, adding that the planes are expected to arrive between early 2024 and mid-2026.

The cargo planes will join another three A321s already in the airline’s domestic cargo fleet and add load capacity as the A321s can carry 23 tonnes of cargo, nine tonnes more than the 737.

Qantas chief executive Alan Joyce said the airline’s cargo arm, which reported record first-half profits, has been one of the group’s standout performers during the pandemic as Australians shifted to online shopping.

“While some of this shift is temporary, even after nearly all COVID-related restrictions are lifted, demand remains well above pre-pandemic levels,” he said in a statement.

Singapore Technologies Engineering, a major A321 passenger-to-cargo convertor, said last week demand for conversions remained strong and orders for the model were booked through 2025.

The lack of passenger aircraft cargo capacity during the pandemic has caused freight rates to skyrocket, delaying the retirement of older models like MD-11s and prompting lessors to rush to convert older unwanted passenger aircraft to carry cargo.

However, the strong cargo demand that has helped passenger-strapped airlines stay afloat during the pandemic is showing signs of slowing amid rising economic uncertainty, fueled in part by high inflation.

Stock picks and investment trends from CNBC Pro: Qantas expands Australian cargo fleet to meet demand for online shopping

Joshua Buckhalter

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