Qantas Group cancels Boeing aircraft commitments, restructures fleet in turnaround plan

SYDNEY, 29 Aug. 2012.Qantas Group officials are restructuring the company’s Boeing 787 aircraft delivery schedule and cancelling firm commitments for 35 Boeing 787-9 aircraft, as part of a five-year Qantas International turnaround plan.

Deliveries of 15 B787-8s to Jetstar will continue as planned, enabling both the transfer of Airbus A330 aircraft from Jetstar to Qantas Domestic and the retirement of Qantas’ Boeing 767 fleet. The first aircraft is scheduled to arrive in the second half of 2013.

They also are retaining and bringing forward by nearly two years options and purchase rights for 50 B787-9. The restructure will cause a two-year delay in the Group’s first B787-9 delivery, to commence in 2016.

These changes are expected to result in a reduction of roughly $8.5 billion in capital expenditure commitments.

“Qantas continues to practice disciplined capital management and, in the context of returning Qantas International to profit, this is a prudent decision,” says Qantas Group CEO Alan Joyce. “The B787 is an excellent aircraft and remains an important part of our future. However, circumstances have changed significantly since our order several years ago. It is vital that we allocate capital carefully across all parts of the Group.

“Qantas has always maintained flexibility in its fleet plan and made changes when required,” Joyce adds. “We have now substantially completed our fleet renewal program for the Qantas Group, with 114 new aircraft delivered over the past four years. Our average scheduled passenger fleet age is 8.3 years, the lowest since privatization and highly competitive by international standards.

“We have 12 A380s in service across our long-haul network and the reconfiguration of nine B747s will be complete by late 2012,” Joyce explains. “Boeing 737-800s will continue to enter the Qantas Domestic fleet as part of the Group’s existing fleet plan, while Airbus A330s will transfer from Jetstar as B787s are delivered. And Jetstar’s domestic and pan-Asian fleet requirements will be met over the long-term by our existing A320 order book and the arrival of B787-8s.

“Fifty B787-9s will remain available to the Group from 2016, in line with the time frame of the Qantas International turnaround plan. We have the right fleet strategy to deliver continued customer satisfaction and position us for sustainable growth over the long term, while enabling us to retain flexibility and manage our capital requirements appropriately,” Joyce says.

Total cash inflow from the restructure will be $433 million, with $355 million expected in 2012/2013.