February 21, 2019 / 8:06 AM / 3 months ago

Australia's Qantas to decide on future domestic fleet next year - CEO

* Airbus, Boeing models in contention

* Qantas has 75 Boeing 737s in current domestic fleet

* Will order long-haul jets for Sydney-London flights first

By Jamie Freed

SINGAPORE, Feb 21 (Reuters) - Qantas Airways Ltd will start the ball rolling on replacing its domestic fleet, including 75 Boeing 737s, toward the end of this year with a decision on the type and number of aircraft expected in 2020, its chief executive said.

The Australian carrier's move will launch yet another contest between Airbus SE and Boeing Co, the two biggest planemakers in the world.

The models under consideration will include Boeing's potential new mid-sized airplane which "on paper looks like it could be a great aircraft for the domestic market", Qantas CEO Alan Joyce told Reuters on Thursday after the airline released its half-year results.

Boeing said last month it would make a final launch decision in 2020 on its proposed new mid-sized jetliner, depending on the results of a round of commercial pre-marketing which it may begin this year.

Qantas' budget offshoot Jetstar has already ordered 99 A320neos to replace its fleet of older A320s, with the first deliveries expected in mid-2020.

The Qantas branded domestic fleet includes 75 Boeing 737s and a far smaller number of A330s that are also used on international routes.

Replacement options include the A320neo and 737 MAX families as well as the potential Boeing mid-sized plane.

"We will look at toward the end of this year and into 2020 a competition for our domestic fleet replacement for Qantas," Joyce said. "We don't need to make a decision until 2020."

Domestic rival Virgin Australia Holdings expects to receive its first Boeing 737 MAX later this year and has 40 on order.

Qantas will decide on a new long-haul jet capable of 20-hour non-stop flights between Sydney and London later this year before it launches the domestic fleet replacement competition, Joyce said.

The airline is considering the 777-8 and A350-1000ULR models for the marathon flights but an order may also include other types such as the 777-9 or A350-1000 designed for shorter routes, he said.

Qantas has not revealed how many long-haul jets it plans to order but Joyce said it was likely to be a "small firm order" with options to take more if they worked well in operation as the airline had done with its 787s.

"We have options of the 787 going forward that have fixed delivery dates and prices on them," he said. "It is our discretion if we want them. That works very well giving us flexibility.” (Reporting by Jamie Freed; Editing by Muralikumar Anantharaman)

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