The Qantas Group is restructuring its Boeing 787-9 delivery schedule and canceling orders for 35 Boeing 787-9s as part of its five-year turnaround plan for the company’s loss-making Qantas International division.
According to Qantas, the group is not changing its plans for Boeing 787-8 deliveries. Deliveries of 15 Boeing 787-8s to the group’s Jetstar subsidiary will continue as planned, with the first aircraft to arrive in the second half of 2013.
This will enable Qantas Group to transfer Airbus A330-200 widebodies from Jetstar to the profitable Qantas Domestic division, and the eventual retirement of Qantas’ Boeing 767-300ER fleet.
Qantas will retain options and purchase rights on 50 Boeing 787-9 widebodies and bring forward their delivery dates by almost two years, making these aircraft commitments (if firmed) available for delivery from 2016.
However, Qantas Group confirms it is canceling its existing firm order for 35 Boeing 787-9s. This restructuring means there will be at least a two-year delay in the group’s first Boeing 787-9 delivery.
The order cancellation will result in a reduction in Qantas Group’s capital expenditure commitments equivalent to $8.5 billion at list prices, the company says.
“Qantas continues to practice disciplined capital management and, in the context of returning Qantas International to profit, this is a prudent decision,” said Qantas Group CEO Alan Joyce. “The B787 is an excellent aircraft and remains an important part of our future. However, circumstances have changed significantly since our order several years ago. It is vital that we allocate capital carefully across all parts of the Group.”
Joyce added: “Qantas has always maintained flexibility in its fleet plan and made changes when required. We have now substantially completed our fleet renewal program for the Qantas Group, with 114 new aircraft delivered over the past four years. Our average scheduled passenger fleet age is 8.3 years, the lowest since privatization and highly competitive by international standards.”
Continued Joyce: “We have 12 A380s in service across our long-haul network and the reconfiguration of nine B747s will be complete by late 2012. Boeing 737-800s will continue to enter the Qantas Domestic fleet as part of the group’s existing fleet plan, while Airbus A330s will transfer from Jetstar as B787s are delivered. And Jetstar’s domestic and pan-Asian fleet requirements will be met over the long-term by our existing A320 order book and the arrival of B787-8s.
“Fifty B787-9s will remain available to the Group from 2016, in line with the timeframe of the Qantas International turnaround plan,” noted Joyce. “We have the right fleet strategy to deliver continued customer satisfaction and position us for sustainable growth over the long term, while enabling us to retain flexibility and manage our capital requirements appropriately.”
According to Qantas Group, the total cash inflow from the Boeing 787-9 order restructuring will be US$433 million, with US$355 million of it coming in 2012 and 2013.
Previously, Qantas Group deferred delivery of six Airbus A380s, two until 2014 and six until 2018. However, Qantas Group is maintaining its order for 78 Airbus A320neo-family aircraft and 32 A320-family jets, all of which are due to go to Jetstar and its low-cost affiliates throughout the Asia-Pacific region.
Qantas is also continuing to take delivery of new Boeing 737-800 jets ordered from Boeing. When the order is complete, it will have 70 737-800s in Qantas Domestic service.