Joyce says 787-9 represents “hugely exciting” opportunities for Qantas

Qantas chief executive Alan Joyce (right) and chief financial officer Tino La Spina deliver the 2014/15 full year results. (Seth Jaworski)
Qantas chief executive Alan Joyce (right) and chief financial officer Tino La Spina deliver the 2014/15 full year results. (Seth Jaworski)

Qantas chief executive Alan Joyce says the Boeing 787-9 Dreamliner will allow the airline to open up new direct services and boost some existing routes to daily.

The company announced on Thursday it would take delivery of eight 787-9s, with the first four to join the Qantas fleet in the 2017/18 financial year and the remaining four in 2018/19.

The eight aircraft are slated to replace five Boeing 747-400s, which will be withdrawn from the fleet prior to requiring a heavy maintenance D check.

Qantas announced the order on the same day it reported a return to profitability in 2014/15 and chief executive Alan Joyce says the decision to purchase the 787 shows the airline has been revitalised and “here for the long haul”.

“This milestone acquisition marks the scale of our turnaround and looks ahead to a new era for our iconic international airline,” Joyce said.

“This is unbelievably exciting for Qantas going forward and we are happy to be in the position to be able to afford the aircraft and get the business case to work.

“This is hugely exciting”.

Joyce had set out three criteria for any potential Dreamliner order, namely Qantas International’s return to sustainable profitability, repaying $1 billion of debt and establishing appropriate staff conditions to ensure the business case for the new aircraft type stacked up.

Qantas said in a slide presentation accompanying the full year results the 787-9’s ultra long range (listed on the Boeing website as 14,140 km with 290 passengers in a two-class configuration) and lower unit costs presented the airline with “future opportunity for growth into markets presently unserved directly from Australia”.

Meanwhile, the lower seat count of the Dreamliner – although no cabin configuration was provided, Joyce said Qantas’s 787-9 would have about 250 seats – compared with the 747-400’s 350-360 seats (depending on configuration) meant there was a “greater level of protection against potential market downturns”.

Qantas estimated the 787-9 used 20 per cent less fuel than the 747-400 and was 15 per cent cheaper to maintain, with the first heavy maintenance check due after 12 years in service.

“It’s got better range, can operate to routes the 747 can’t with full payload, it is a fantastic replacement aircraft with less risk associated with trying to fill up a smaller aircraft,” Joyce said.

“Markets like Melbourne to Dallas open up as an opportunity for us because the aircraft has the potential range to do that in both directions.

“Routes that are long range routes that we don’t fly today, routes that have low levels of traffic volumes that didn’t justify a 747 or routes where we have less than dailies where we would love to get to dailies or routes that we want to fly over a hub and go directly into other destinations not having to fly through LA.”

Potential destinations within the range of Qantas's Boeing 787-9. (Qantas)
Potential destinations within the range of Qantas’s Boeing 787-9. (Qantas)

Qantas’s order consisted of five exercised options and the reallocation of three 787-8 orders for its low-cost carrier subsidiary Jetstar to 787-9s.

The company said it would allocate between $900 million and $1 billion towards capital expenditure in the current financial year, which would include prepayments for the 787-9 order.

Capital expenditure over the following three financial years – 2016/17, 201717/18 and 2018/19 – would total between $3.6 billion and $4.5 billion, representing between $1.2 billion and $1.5 billion per year.

The company has 15 remaining options, which have firm delivery dates and a fixed price, and 30 remaining purchase rights, which have a fixed price but no firm delivery date, for the 787 family that have to be exercised between now and 2024/25.

Joyce said the rest of Qantas’s 747s and A330s would eventually be replaced, with the timing of the fleet renewal program dependent on the performance of the airline in the years ahead.

“We are in a very good position,” Joyce said.

In other fleet news, Qantas said it expected to pick up six aircraft in 2015/16 – two Boeing 717s, three 787-8s (for Jetstar) and one Fokker 100. In terms of withdrawals, one Boeing 747-400 and two Airbus A330-200s would be withdrawn during the year.

Joyce said the addition of eight 787-9s to the fleet represented more opportunities for pilots and cabin crew, given the net addition of three aircraft after the withdrawal of the five 747s.

Comments

  1. Jason says

    “Qantas estimated the 787-9 used 20 per cent less fuel than the 747-400 …”

    Only 20 percent less fuel? I would have thought closer to half???

  2. Chris GG says

    Could the ex QANTAS A332s end up in RAAF service in MRTT configuration?

    Others might know whether they are similar in build to existing tankers.

  3. paule says

    It is indeed a shame to see the A330 go, even if it is a long term goal. They are a fabulous aircraft to fly in and, domestically, far superior to either the B737 and B767. Hopefully, however, the low seat count for the QF 787-9’s would show up in a 2-4-2 configuration. Remembering that CX will have the A350XWB’s, seat width will certainly be a determining factor when people make a decision about flights to northern Asia, North America and Europe. QANTAS must stay competitive against other airlines by offering a degree of comfort on its long hall flights – even in economy.

  4. says

    I see that Jetstar are supposed to be getting 3 more 787-8 in 2015/2016. I wonder whether he is referring fro the two delivered in July and the last one coming on Sept 30th (bearing in mind the first delivered on July 3rd was actually ready for delivery in April, but not transferred to the Qantas books until the new financial year), or is he referring to buying three more new ones as the press release sort of implies!

  5. Ben says

    Better late than never! Welcome to the long-haul ETOPS club Qantas.

    I’d bet a part of this delay was waiting for JQ to do the hard yards with EDTO certification to enable them to get almost ‘out of the box’ high EDTO times to enable QF to rapidly increase them to those required to do sectors like SYD-JNB and SYD-SCL to replace the -400ER’s.

  6. John Harrison says

    Good news indeed, one thought there is a picture, in the report with all the places the B787-9 can go to from Australia. The big question is will Qantas go to any of them, will Alan Joyce let the B787’s have their wings and start going to new or back to old places again. It will be interesting to see what Qantas does with these new shining aircraft..

  7. KY says

    Looking at the fuel burn tables for the B747-400 with 394 seats and B787 with 250 seats, the fuel saving is about 32% per seat-km (29% using Piano X B787 model) not 20% fuel savings. (FYI B777-300ER would give 25%)

  8. Chuck says

    One hopes the extra aircraft will allow both increased frequencies on existing routes, as well as new city-pairs. If new city-pairs are in play, the next logical question is – should the routes be new destinations, or new points of origin from within Australia, or both?

    If QF International (and for that matter other Australian carriers) are to survive and prosper long term they will need to ensure that they operate sufficient diversity of routes so that global incidents (terrorism, volcanoes, regional economic downturns) do not dominate the economics of their operations. B787 replacing B747 in part enables this for QF – through the flexibility of more frequencies or new routes. .

    The range capacity of NEO versions of A320/B737 families will likewise be a determining factor in the success of a new era of hub-busting – circumventing the dominance of intermediate international hubs in globally central locations like Dubai, or Singapore.

    B787 and A320/B737 NEO should eventually mean new non-stop routes become viable on range-payload-fuel calculations. New services from existing capital locations like Perth-London, or new capital locations like Canberra-Beijing using B787; or new services from existing regional locations like Cairns-Hawaii; or new services from regional locations like Newcastle-Hong Kong, or Townsville-Singapore should all come into play with this new equipment.

    The question now is what mentality are the QF board using in re-equipping the Airline – expansive or conservative? Do they only stick to the trunk routes or do they create new markets?

  9. Tim says

    Still think the A350-900 would of been a better option. Common type rating with the large fleet of A330s and minimal extra training to fly the A380. There must also be early slots left from the Emirates cancellation. The 787-9 is also pushing in as a 747 replacement, will mean a reduction in capacity or stuffing pax in like sheep, possibly both!
    This must also mean Qantas will be after some 777s in time but will they be bargin basement 300ERs or 8/9s?

  10. Andre says

    It’s nice to see Qantas finally make profit and Alan Joyce seems actually much smarter than I first thought but I am still not over the financial ‘sell out’ to Emirates, who are laughing all the way to the bank, as per usual. To give up Frankfurt as one of your destinations after 30+years and to agree to worse connection times via Dubai (so passengers will more likely use EK instead of QF) on the Aussie-Middle East legs is just stupid. And no one is talking about how much business class travel To Europe QF has lost because EK does not arrive in ANY European city before lunch time instead of mornings like it used to be. Stupid.

  11. says

    I recently flew in Business class and sat next to a 1st Officer recently transferred to 747-400 from a 1st officer position on Boeing 767 Aircroft on domestic. Apparently these 767 flight crew had been told that the likely new destinations for the 787-900 are in order of priority
    Melbourne-Dallas
    Melbourne – San Francisco
    Sydney-Vancouver
    Sydney Toronto
    Sydney-Chicago
    Sydney-Washington
    Brisbane-Las Vegas
    Sydney-Las Vegas
    Sydney-Santiago
    Sydney-Johannesburg-Capetown
    Perth-London

    Other routes being looked at are:
    Sydney-Mexico City
    Sydney-San Diego
    Sydney-New York
    Sydney-Dubai-Berlin
    Sydney-Dubai-Paris
    Sydney-Dubai Frankfurt
    Sydney-Hong Kong-London

  12. Stuart Lawrence says

    I agree with above comment and why does not qantas go with 747 800 777 and 787 and fly to places where Australians have relatives and busines connections for example milan italy paris france frankfurt germany seoul south korea canton china kula lumper malaysia etc