Australasia’s Narrowbody Fleet Renewal Gains Momentum

Australasian airlines are focused on upgrading their narrowbody fleets this year to tap into strong domestic and international short-haul demand, while widebody additions further ahead will bring major changes to long-haul services.

Qantas has begun taking delivery of its first Airbus A321XLRs, which will form the backbone of its domestic narrowbody fleet and also offer new international opportunities. Meanwhile, Virgin Australia is set to receive several more Boeing 737 MAXs, and Air New Zealand has boosted its short-haul operations with new A321neos. In neighboring Papua New Guinea, Air Niugini is slated to begin taking delivery of Airbus A220s.

• New narrowbodies expand main players’ network options
• Widebody fleet growth is set to resume next year

Although these airlines have no widebodies scheduled for delivery this year, both Air New Zealand and Qantas have aircraft due to arrive in 2026 that will enable new long-range flights and cabin products.

Carriers in this region have expanded their narrowbody fleets beyond pre-pandemic totals, but their widebody fleets are still smaller than in 2019. This reflects the quicker rebound in domestic and close-range international markets versus long-haul travel.

Data from CAPA – Center for Aviation shows that Australia’s major airlines—Qantas, Jetstar and the Virgin Australia group—have 261 narrowbodies in service (see chart). This compares with 234 before the pandemic, including 15 operated by Tigerair Australia prior to its termination in 2020. The major gains in narrowbodies over the past five years have come from Virgin Australia and Jetstar.

The trend has been the opposite for widebodies, with the Australian major carriers now operating 61, versus 79 in early 2020. Virgin Australia cut its widebodies entirely during the pandemic, and Qantas has reduced its widebody fleet slightly.

Air New Zealand, meanwhile, has about the same number of narrowbodies and fewer widebodies compared with early 2020, and some of these are grounded due to lack of engine availability.

Narrowbody numbers in Australia are set to increase further this year, thanks to new deliveries for all of the main carriers.

“After several years of delays in the delivery of aircraft and global supply chain issues, both the Qantas Group and Virgin Australia are expected to receive new aircraft in the second half of 2025,” the Australian Competition and Consumer Commission noted in an August domestic market report. However, the carriers have said their deliveries and redeployed aircraft “will be used to replace leased and older aircraft in the first instance, before considering significant expansions in [domestic] capacity,” the commission report stated.

Qantas took delivery of its first A321XLR in June, a second is expected in August and a third in October, Qantas Domestic CEO Markus Svensson said during the CAPA Australia Pacific Airline Leader Summit in Cairns, Australia, on Aug. 1. The airline is due to take delivery of a total of seven of the aircraft type by June 2026.

Qantas has 28 A321XLRs on firm order, and options for many more. The group’s low-cost carrier subsidiary Jetstar also has XLRs on order, which are due to begin arriving in 2027.

The Qantas full-service carrier will use its XLRs to replace Boeing 737-800s. The aircraft “will definitely be a game changer for domestic and short-haul international” flights, Svensson said.

The XLRs are being deployed initially on domestic routes, but Qantas plans to take advantage of their greater range for international services at some point. No decisions have been made about which international routes will feature this aircraft, but they will be particularly useful on routes where 737-800s have payload restrictions due to range, Svensson said. They can also be used to open new routes.

Replacement of the 737-800s will occur over about a decade. In the meantime, Qantas intends to undertake cabin refits on 42 of its 75 passenger 737s.

Like many airlines, Qantas has been forced to adjust its fleet plans due to delivery delays. The carrier has had to keep some older aircraft longer than expected, and plans to lease four more 737s this year to cover for delays to XLR deliveries, Svensson said.

The Qantas Group’s fleet will also receive a boost following its decision to close its Singapore-based joint venture Jetstar Asia, resulting in the redeployment of 13 Airbus narrowbodies to its Australia and New Zealand operations.

New narrowbodies are also coming into the group’s regional business. Qantas ordered 29 A220s for its QantasLink subsidiary, and seven have been delivered so far.

Like its major rival, Virgin Australia is continuing to add narrowbodies and regional jets to its fleet. The carrier is due to receive 16 aircraft in the fiscal year that began July 1, CEO Dave Emerson said at the CAPA conference. These will include 12 737 MAXs, and the remainder will be Embraer 190s to replace Fokker 100s in its regional fleet.

Delivery delays have required the airline to “stretch out its fleet renewal” by extending leases and wet-leasing domestic aircraft, Emerson said.

Virgin has so far received 10 737-8s, which are operating alongside its more than 80 older 737-800s and -700s. The carrier has 29 737 MAX aircraft remaining on order, comprising 18 737-8s, one 737-9 and 10 of the -10 variant.

Virgin conducted an initial public offering (IPO) in June, which reduced majority owner Bain Capital’s share of the airline to 40%. Emerson stressed that the IPO was not aimed at raising capital to buy aircraft, because the carrier is doing well financially and is generating enough money to fund its growth and fleet renewal plans. Rather, the IPO was intended to set up a new ownership structure for the next phase of Virgin’s development, he said.

The airline accounts for about a third of the Australian domestic market and will seek to maintain that share level, according to Emerson. Virgin has a much smaller international network than before the pandemic and only operates to a handful of international destinations in Southeast Asia and New Zealand that it can reach with its narrowbodies.

One change coming up for Virgin’s narrowbody fleet will be that passengers will soon be able to bring small pets in carriers into the cabin. While this is common in Europe and North America, it will be new for Australia. Virgin has been working through the regulatory requirements and plans to allow pets before year-end, Emerson said.

Air New Zealand has taken delivery of two new A321neos in recent months, one in June and the second on Aug. 13. These are configured for short-haul international flights rather than domestic operations.

The two aircraft will help mitigate a fleet availability shortage caused by global heavy maintenance backlogs on Pratt & Whitney geared turbofan engines. Air New Zealand has five Airbus narrowbodies grounded for this reason, and four of its Boeing 787s are parked due to maintenance bottlenecks for Rolls-Royce Trent 1000 engines.

The narrowbody engine shortage has frustrated Air New Zealand’s fleet and network plans for the past several months, but the arrival of the two A321neos will help the carrier resume growth on its Australian and Pacific Island networks, Chief Commercial Officer Jeremy O’Brien said during the CAPA event. The carrier has also managed to lease and buy some extra engines for its narrowbodies.

Air New Zealand is launching a major push in the Australian market for the upcoming summer season, and its capacity is projected to be up 10% year over year for that peak period, O’Brien said. A new route between Christchurch, New Zealand, and Adelaide, Australia, is due to be launched in October.

Qantas is also making a push in the Australia-New Zealand market. O’Brien noted that demand remains strong there despite intense competition, and capacity between the two countries is still at 91% of pre-pandemic levels, so there is room for growth.

Air Niugini is adding a new narrowbody type: The first of its 11 A220s on order is due in September, CEO Gary Seddon said during the CAPA summit. A second is scheduled to arrive in November and a third in December. The remaining eight aircraft are due by 2028.

The A220s are intended to replace the carrier’s Fokker 70 and 100 regional jets. It has nine of these in its fleet, seven of which are in service, according to the CAPA fleet database.

Replacing the Fokkers will allow Air Niugini to expand its network and increase frequencies, Seddon said. For example, the carrier will be able to operate A220s on some of its international routes alongside its widebodies, such as between Singapore and Port Moresby, Papua New Guinea.

While the short-term focus is on narrowbody additions for Australasian carriers, widebody deliveries will take more of the spotlight in 2026.

These will start with Air New Zealand’s next two 787-9s, which are due to arrive in February and March. The aircraft will be the carrier’s first to be equipped with GEnx engines, instead of the Trent 1000s powering its current 787 fleet, and they will also have a higher premium seat mix.

The engine and cabin configuration changes will effectively give these 787s greater range, and Air New Zealand intends to use them on its longest route between Auckland and New York. They will have fewer payload restrictions than those required for the carrier’s current 787s on the New York route. It will “really change the commercial dynamics to have fit-for-mission aircraft” operating these flights, O’Brien said.

Another notable feature being introduced on the new 787s will be Air New Zealand’s Skynest product, comprising six bunk beds that can be booked for 4-hr. periods by economy passengers. The carrier has yet to divulge pricing, but it will likely be NZ$400-600 ($240-350) per sleep period.

Qantas is on track to take delivery of its first Airbus A350-1000s in late 2026, Svensson said. These aircraft have been modified to extend their range, and they will be used to operate the airline’s proposed record-setting ultra-long-haul flights between Sydney and both London and New York starting in early 2027 under its Project Sunrise initiative.

The first of these are already in production, Svensson said. Qantas has 12 of the modified A350-1000s on order and has also ordered 12 of the standard version of the -1000 which are due to be delivered beginning in fiscal 2028.

Virgin Australia has not ordered any widebodies, but it will consider doing so, Emerson said. The carrier began wet-leasing Boeing 777s from Qatar Airways in June, which could be a step toward ordering its own twin-aisle jets.

The 777s allow Virgin Australia to offer flights from Australian destinations to Doha, in partnership with Qatar Airways. This means Virgin can test the long-haul market without having to spend many millions on buying widebodies, Emerson said

“We will monitor the performance of these flights and see what the economics look like,” he said. This will give the carrier an understanding of whether “we have an investment case to put our own capital into long-haul [aircraft],” he added.

Virgin will probably take a couple of years to assess the results from the wet-lease flying, Emerson said. He noted that the arrangement with Qatar Airways has been authorized for five years. The partners will also consider transitioning the wet leases to dry leases.