If the B747's have to be retired due to excessive fuel burn, why aren't the A380's also being retired?
It isn't simply a case of fuel burn. The fleet replacement decision is a strategic decision: It requires nuanced timing.
As younger air frames they have a higher residual book value. Qantas depreciate straight line for aircraft between 2.5 to 20 years.
'The Qantas Group uses straight-line depreciation rates for all of its property, plant and equipment (excluding freehold land, which is not depreciated) using rates ranging from 2.5 years to 40 years. Useful lives and residual values are reviewed annually and reassessed having regard to commercial and technological developments, the estimated useful life of assets to the Qantas Group and the long-term fleet plan.'
Thus they are stuck with them (A380) for a while yet.
- The decision to pocket millions on share buy backs delayed having sufficient capital to REPLACE the depreciated 747 fleet.
- They chose self interest over shareholder interest.
- One might argue they chose self interest over the environment.
- They burn more fuel per ASK than the competitors because they delayed the 747 retirement and refused to commit capital to replacement.
- Their competitors have already done so, replacing depreciated 747 generation aircraft up to a decade ago.
Qantas has a group fleet plan or so they tell investors, but it is clear at 'Executive management' level nobody bothers reading it. Qantas wrote off the 747 fleet in FY14 (the big on paper loss)
Replacing that fleet has not bitten them for one reason only; the fuel price fell.
Qantas need new management