Qantas cuts Dreamliner order

Friday 26th June 2009

Qantas Airways, set to be the world’s biggest customer for Boeing Co.’s much-delayed Dreamliner aircraft, cut its order by 15 planes to 50 to save US$3 billion and deferred first deliveries for three years.

The operating environment for airlines “has clearly changed dramatically” since Qantas placed the biggest order for the B787-8s and B787-9s in December 2005, chief executive Alan Joyce said in a statement. The changes “provide greater certainty going forward in terms of our fleet renewal and growth strategies as well as broader resource planning and matching capacity withy demand.”

Boeing this month delayed a flight test for the Dreamliner scheduled for June 30 after finding areas above the wings of the carbon fibre aircraft that needed reinforcing, meaning delays for customers awaiting for the more fuel-efficient long-distance planes to replace older models such as the B767. The fifth delay for the aircraft probably suits customers facing a slump in demand for air travel which is forcing them to cut costs.

Qantas in April slashed its full-year pretax earnings forecast to a range of A$100 million to A$200 million, from a previous estimate of about A$500 million, citing the “significant deterioration” in trading conditions, especially for international flights. It earmarked some 1,250 jobs for elimination including management positions.

Shares of Qantas rose 1.3% to A$2 on the ASX today and have slipped 27% this year. That’s a sharper decline than for Air New Zealand, which is down just 5.2% this year and rose 2.2% to 93 cents on the NZX 50 today.

Japan’s All Nippon Airways, which was to have received the first Dreamliners off the production line, slipped 0.3% to 343 yen today on the Tokyo Stock Exchange, and is little changed in the past six months.

Qantas said it reached agreement with Boeing to defer deliveries of 15 B787-9s destined for the international routes of its Jetstar low-fare unit for three years until 2013. Fifteen B787-8s will be delivered starting from the fourth quarter of 2014 for Qantas’s Australian routes, allowing it to retire its remaining B767-300 fleet. A further 20 B787-9s for Qantas and Jetstar will be delivered from 2015 through 2017.

Qantas cancelled orders for 15 Boeing 787-9s that had been scheduled for delivery in 2014/2015.

Joyce said negotiations with Boeing had begun some months ago and weren’t related to the latest test flight delay.

Businesswire.co.nz

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