Qantas to let first 787 option lapse

Qantas Boeing 787-9 VH-ZNA arrives in Melbourne on October 27 2017. (Victor Pody)Qantas will let the first of its 15 Boeing 787 options lapse later this month, CEO Alan Joyce has told Reuters.

The first of those 15 options was due to be exercised in February, while Joyce says Qantas would make a decision on firming up further options into firm orders in a “few more months”, the Qantas boss told Reuters’ Jamie Freed in an interview ahead of the Singapore Airshow on February 5.

Qantas currently holds firms orders for eight 787-9s, the first three of which have now been delivered. Beyond that the airline holds 15 options and 30 purchase rights on the aircraft, but last October Joyce said a decision on exercising some of those options won’t be taken until some point in 2018 after seeing how the first aircraft perform in service.

“There will be a gap, we do need to bed down the [787] operation, make sure that everything is working,” Joyce told media at Boeing’s Everett plant on October 15 ahead of the delivery of the airline’s first 787-9, VH-ZNA.

“We do have flexibility with Boeing and there is availability [of delivery slots] at the end of 2019, 2020 onwards.”

It’s a relatively conservative approach to introducing the aircraft into service, but nonetheless it seems likely the ultimate Qantas fleet will end up as larger than eight units.

Boeing’s latest Current Market Outlook forecasts airlines in Oceania (Australia and New Zealand) will require 150 medium-category widebody airliners of the 787 size over the next 20 years. Given Qantas is by far the largest of the three major airline groups in Australasia, that suggests a much larger Qantas 787 fleet in the longer term.

In October Joyce hinted a 787 fleet in the “teens” was likely at the minimum.

“We’ve always said that the eight aircraft that we have as an example of the 787s is a minimum,” he said.

“We’d like to have a lot more than that. You actually do have to get in the teens, I think, for the aircraft to have a minimum flyable level of operation. Eventually, we will be ordering more of the 787s because we think it’s a great aircraft. It’s just at what pace of time that we do that.”

 

Comments

  1. Dan says

    Weighting to see what happens with the A350 visit to Sydney soon first I bet. I’m sure Boeing know that Airbus will be meeting with them.

  2. Craigy says

    Hey AA, how about mentioning the other interesting comment about the A321 NEO for Jetstar which could be used to replace B788 on routes like Sydney to Bali annd freeing the aircraft for other opportunities in Asia. Sort fits in nicely with a previous story on the A321LR test flight commencement.

  3. deano says

    So what goes on here ?
    Jetstar have been flying 78s for years
    Yes they are a different model, but still, what do they need to know that sees 15 options vanish at what has been talked about as a bargain basement price
    QF has an aging fleet of a330 (many on medium haul international routes) that they will soon look to be replacing so 15 more 787s should not be that much of a commitment

    Here is what I think will be the reality
    QF is holding out for the a350 or 777 that can do Sydney-London or New York
    They will then cancel their 787 order and go with the 777 or the a350 in lieu of the a380s they ordered
    They will offload their 8 x 787s to Jetstar for expansion into China

  4. James says

    @ deano

    I would doubt QF would transfer them to JQ after the training they have done on mainline crews. I think what they are waiting on, is the actual performance of the machine on these ultra long haul routes they are/want to introduce.

    I just don’t know about the 350. I reckon they will swing to the -8x but you never know. It will be a very interesting match up! Looking forward to the result.

  5. David Grant says

    One thing I’ve not seen is…. will Qantas lose any money by dropping this option? Do airlines have to pay a (non refundable) deposit when initiating options or purchase rights?

  6. Bill says

    To make it abundantly clear, Qantas have let an option for 1 (one) aircraft lapse, there are 14 (fourteen) further options that will be due to be exercised over the coming months/year and the decision will be made on each of these as their time comes due.

  7. Craigy says

    @Deano What a load of rubbish.

    What Qantas are looking at is the ultra long haul. The PTH – LHR is a test route for all the other ultra long haul that project Sunrise envisages. There is also the research Qantas has invested in with Syd Uni around long haul travel and its affects.

    Ok so Jetstar operate B788. Thing is Jetstar operate a different business model. So it’s not so easy to compare.

    Thing to remember is that Boeing and Airbus need bluechip airlines to buy their products so they get very favourable deals. This non take up of one option is nothing. Boeing will indulge qantas with favourable terms on the 778 deal potential.

    The interesting thing is the competition for capital between Qantas and Jetstar. I think this demonstrates the difficulties management have with expending limited capital funds. Interested to hear the comments from the many armchair ceos out there

  8. Rod Pickin says

    When Boeing comes up with the B777 answers for QF then we can expect clarification on fleet orders. At the moment though my experience with the B787-9 is no way near the superior A350

  9. Trogdor says

    Qantas is waiting until they see how things go on the PER-LHR route, not just from the POV of aircraft performance, but also in terms of how many people will switch over to using Perth as a “hub”. If it takes off, then expect to see Qantas get bullish about taking on 787s to run routes into Paris, Frankfurt and possibly Rome or Athens. If not, then they’ll wind back their order and stick to using Dreamliners on US runs out of Brisbane and Melbourne, plus possibly some trips into Asia.

    The other factor that’s changed is the advent of the 777-x and 797. The 777-8 allows longer flights than even a Dreamliner can manage, while the 797 will do shorter routes more efficiently. My bet is that within 5 years Qantas will place orders on both.

  10. Ben says

    Tom and option is a slot in the queue at an agreed price.

    Give up that option then that aircraft slot is available to someone else. If you want another later then you take what ever slots may be available. And the cost all depends on the original contract. It may allow deferred options at a the same price or it may be at a new price. All depends.

  11. PC says

    Agree that a wait an dsee approach maybe the way to go on the 787-9 routes. Also A350 data presentation offer etc adds another bargaining chip to QF Dont forget 787-10’s are now rolling out (commonality factor not to be sneezed at) Not sure if 777-8 has common training engines etc but may also be a factor . Also given RR Trents are doing some fixes on the donks would be another factor .Joyce is also probably being prudent on what financial pressures coming (In oz going to be a tough 2019/2020 imo ) – As o/p’s have properly said no big deal to let Boeing have this slot as heaps in line . Lots on Pressure on the legacy carriers also from LCC’s (look at SQ) being eaten into by its Scoot love child . .CX is still hurting because f similar pressures even with its rather nice A350’s . Joyce is playing the LONG game I reckon while he also trains crews which are about to get a bit short of quality candidates for deployment in 2020.Interesting times .You Think EK are really going to do us ANY favours next 5 years – vicious industry

  12. Rod Pickin says

    All this hype over the new planned QF ops PER LHR with the B787-9: – from a customer point of view I wonder why one would bother when you have to get to PER first either by the same flight or via a DOC and then submit yourself to at least 17 hours in the tube. If you cant afford a premium fare then you have to be desperate. At the same time of course, effective March you can fly QF via SIN to LHR, almost same elapsed time on the A380; I know what I would prefer.
    Interesting to note that it was Brett Godfrey who first muted the PER LHR ops using the B777-200LR. It would also be great if QF would brief us on the planned in cabin service schedule and facilities for the PER LHR ops. I have no doubt that up front all will be tops, but what are the rear end punters going to have to put up with. I have been around this game too long to expect nothing but the minimum.

  13. Jim says

    Will Qantas use BNE much in project sunrise because SYD and MEL seem to be attracting a lot of attention, (BNE – LHR etc.)

  14. James says

    @ Rod Pickin

    In your first few paragraphs you say why would anyone bother.

    In the next you say Brett Godfrey first floated it and you’re interested to see what QF are offering in the cabin. As you’d know because you’ve been around the game a long time

    The punters down the back won’t get much more, because they won’t pay more.

  15. James says

    @ Marc

    Are you a fleet analyst for the majors?

    It’s just comments by enthusiasts. If you were anything more than that, you’d see through all the wants and dreams and sooky comments.

    Let them have their say. They don’t hurt anyone.

  16. Rod Pickin says

    It is a common description of ECY these days, “Cattle Class” Since the inception of the QF B747 the ECY cabin has been downgraded thus; – 9 abreast to 10 abreast; pitch from C36 ins to C30 Ins or less. “Narrow galleys” fitted all allowing the fitting of an extra 10 rows of seats.
    Up front FCL went to PCL, (seats to beds) upper deck from the Cap. Club to up to 30ECY (some configs) or 16 JCL much more in the 300 and series 400 and yes, all very comfy etc etc. In addition, these facilities were/are supported by outrageously costly airport lounges, showers, top class catering and drinks galore and even expensive weekends away with staff escorted trips for P/J clients at naturally upmarket mainland resorts. It is only a matter of time before the modern day QF fleet has a cabin re-arrangement and more will be given to the front at the expense of the back. This is not a whinge, it is a fact. From a pricing aspect it would be good to see the QF costing of an ECY seat to SYD LHR on an 8 abreast B787-9 with seats at say 36Ins pitch. Sure it is good to have Premium ECY seating but does it have to be at such a pitch?
    Interesting to hear what others say. Cheers, just for the record, I am 188cm tall.

  17. Skystar says

    QF have options on eight A380s to which Joyce said they will not take.Would they have non refundable deposits on these options.Apparently Airbus will be giving a demo flight on the A350-1000 that is on tour at the moment to QF management and other decision makers.Might Airbus be offering the A350 in lieu of the A380 options.

  18. Vannus says

    To James, above…….

    Yes, commentor, Rod Pickin, has been around a VERY long time, & knows about what he posts.

  19. James says

    @ Vannus

    What exactly does he know about? Stating the obvious? Knowing old 747 configs.

    Who cares how long he’s been around. I have no doubt that when Rod first got into the industry the config of QF’s (and others) 747’s were an absolute marvel. So comfortable.

    But would your mate Rod conceed that financial times have changed???

    Why is everyone so hellbent on pointing out it used to be great, now it’s no good.

    Maybe I’m just different. Or don’t like complaining about stuff that won’t change, but to me it’s so simple. That’s the config that QF want, that’s the one that they think will make them money and that’s the one that will keep shareholders happy.

    The ONLY way you will have an impact is by letting your feet do the talking and walk over to another carrier.

    And Rod, I’m 185cm tall. If I ever go to LHR (out of SYD OR PER) then I will brace for what’s ahead and be grateful it was affordable and I was able to do the trip. Otherwise, I’ll shop around and get there as cheaply as I can with another carrier. Maybe that’s a hint as to how people view air travel these days…

  20. David says

    I can’t wait to travel PER to LHR direct. I have to travel to Perth first, and it doesn’t, worry me. The reason I like the direct idea, is I avoid the inconvenience of Singapore, and the inconvenience of the extra security check.

  21. Philip says

    I will choose a QF flight with an A330 anytime.
    2 4 2 is much more comfortable than the 3 3 3 on their 787