Qantas Defers Delivery and Cancels Orders for Boeing 787 Dreamliners

Qantas has reached an agreement with Boeing to defer the delivery of 15 Boeing 787-8 aircraft by four years and cancel orders for 15 Boeing 787-9s scheduled for delivery in 2014 / 2015.

Qantas Chief Executive Officer, Mr Alan Joyce, said the changes to the group's Boeing 787 orders were appropriate in the current climate, and that discussions with Boeing, which commenced some months ago, had not been influenced by the announcement this week of a design issue and further delay to the aircraft's first flight.

"Qantas announced its original Boeing 787 order in December 2005, and the operating environment for the world's airlines has clearly changed dramatically since then," Mr Joyce said. "The latest delay is disappointing, but we do not expect it to impact the Qantas Group given these changes to our delivery program. We remain committed to the aircraft as the right choice - for Jetstar's future international expansion, Qantas' growth and as a replacement for Qantas' Boeing 767-300 fleet."

After the order changes, the Qantas Group will remain one of the biggest airline customers for 787 family of aircraft.

The changes will see:

- Qantas Group firm orders reduce from 65 to 50 aircraft, comprising 35 Boeing 787-9s and 15 Boeing 787-8s;

- the group's first 15 aircraft - Boeing 787-9s for Jetstar's international operations - delivered from mid-2013, around three years later than planned. Jetstar was to take delivery of 15 smaller Boeing 787-8s in mid-2010;

- 15 Boeing 787-8s follow over the 12 months from the fourth quarter of 2014 for Qantas' Australian domestic operations and to retire the remaining Qantas Boeing 767-300 fleet;

- remaining deliveries, of 20 Boeing 787-9s for both Qantas and Jetstar international operations, take place from the fourth quarter of 2015 through to 2017; and

- Qantas retain the ability to purchase up to 50 additional aircraft.

The cancellation of the 15 Boeing 787-9s is expected to reduce the Qantas' aircraft capital expenditure by around US$3 billion based on current list prices.

Details of the contractual agreement with Boeing remain confidential, but the settlement is materially in line with that previously recognised.

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