Qantas Air Lines

Qantas cancels orders for 15 Boeing 787s

By THE ASSOCIATED PRESS

The Associated Press

AP -- Australia's Qantas Airways Ltd. said Friday it had canceled orders for 15 Boeing 787s and delayed the delivery of a further 15 aircraft due to turbulent market conditions.

Qantas Chief Executive Alan Joyce said the decision had not been influenced by Boeing Co.'s announcement earlier this week of a design issue in the 787 and further delay to the aircraft's first flight. He said discussions with Boeing about the order had started some months ago.

Qantas said it had reached a mutual agreement with Chicago-based Boeing Co. to defer the delivery of 15 Boeing 787-8 aircraft by four years and cancel orders for 15 Boeing 787-9s (which are slightly larger) scheduled for delivery in 2014 and 2015.

Joyce said Qantas remained committed to the 787 as the right choice for the international expansion of Jetstar, its low-cost subsidiary, and as an eventual replacement for Qantas' Boeing 767 fleet.

The 787 is the first commercial jet made mostly of light, sturdy carbon-fiber composites instead of aluminum. Large parts of the plane, such as the fuselage sections and wings, are made in factories around the world and flown in a huge modified 747 to Boeing's widebody plant in the Seattle area, where they are essentially snapped together.

Boeing said Tuesday that it needed to reinforce small areas near the connection of the wings and fuselage before conducting a test flight of the jet.

Boeing spokesman Miles Kotay said Friday that Qantas remains one of its largest customers for the 787, with 50 still on order.

"They are committed to the 787 for their own growth and to replace their aging airplanes," he said.

The cancellation of orders for 15 787-9s would reduce the group's aircraft capital expenditure by $3 billion based on current list prices, Joyce said.

He said Qantas announced its original 787 order in 2005 and the "operating environment for the world's airlines has clearly changed dramatically since then."

"Delaying delivery, and reducing overall B787 capacity, is prudent, while still enabling Qantas and Jetstar to take advantage of growth opportunities and market demands, both domestically and internationally," he said in a statement.