Walking and chewing gum

Thankfully it appears that financial analysts will have no such impact on Alan Joyce’s push to buy the 787 and he is more likely to give analysts a dressing down for getting it so wrong on Qantas’s fortunes and giving him the thumbs down 12 months ago.

Early in June Bloomberg quoted Michael Bush, head of credit research at NAB in Melbourne, as saying that he wasn’t sure if Qantas had the balance sheet strength to get its investment grade rating back and buy up to 30 787s.

“It all comes back to where Qantas’s priorities lie,” Bush told Bloomberg.

Qantas has 50 purchase rights for the 787 at very favourable prices and it can start receiving the aircraft from 2017 (as our analysis on the Qantas fleet elsewhere this issue shows – Ed).

The warning from NAB came after an investor conference in May where the airline’s new CFO Tino La Spina said Qantas had a “unique opportunity” to replace its 747 fleet with “new next-generation aircraft”.

However, Joyce has scotched the suggestion that the 787 will be delayed.

Speaking with Australian media, including Australian Aviation at the IATA AGM in Miami, Joyce said the airline could “chew gum, walk and sing at the same time”.

The Qantas boss said that the NAB suggestion was flawed as the airline would qualify for an investment grade rating if it got the debt down and improved performance to where it needed to be.

“That can be achieved with buying the aircraft in the future,” he said. “You have to be in a position where you’re investing continually for the future, you are paying down debt and strengthening your balance sheet and getting yourself back to investment grade and you are giving returns back to shareholders. And that’s the position we want to get the airline back in. ” Qantas must have the 787 – assuming the A350 is off the table because of the very attractive deal Qantas has locked in for the 787 – if it is to have any credible future.

The plane has the ability to catapult Qantas back to a major player in the international arena for the 787 is not just another aircraft, it is without doubt the greatest leap in innovation since the Boeing 707.

And that giant leap was very much at the core of the delays in the program but now the 787 is a mature aircraft with all issues resolved and over 260 delivered.

And there is no question that fuel prices will climb again and the

The 787 has the ability to catapult Qantas back to a major player in the international arena.

imperative for an economical twin will be overwhelming.

Qantas’s head of International Gareth Evans also flagged in Miami that the 777X models are on the radar as a longer-term A380 replacement and that the airline would not buy any more A380s beyond the 12 it has.

The 777X/787 combo would give the airline unprecedented flexibility and economy and return it to the forefront of aircraft development and technology, a mantle it held for decades.

The debate of whether to buy the 787 is best summed by your columnist’s favourite Albert Einstein’s quote, that “not everything that counts can be counted, and not everything that can be counted counts. ” What you can’t count is the lift in staff morale of ordering arguably the best plane available or the publicity and positive press of such a move…nor can you so easily count the impact on passengers who have flocked to the 787 because of its host of new cabin features.

Qantas must commit to the 787 as quickly as possible and expand the airline’s international operations to further fragment the Pacific (the ‘new’ services to San Francisco are a good start) with new non-stop routes, for that is the future.