Alan Joyce: Qantas won't rush on follow-up Boeing 787 orders
By Bloomberg News, February 5 2018
Qantas will start to decide this year whether to take up its options and purchase rights for as many as 45 Boeing 787-9 Dreamliners.
“We are just taking delivery of the aircraft this year so we really want to see the case working and business case performing the way we expected to,” Qantas CEO Alan Joyce said.
“Once we’re comfortable with that, then we will put the order in for further aircraft to replace the (Boeing) 747s.”
According to Reuters, Joyce will let the first of the next 15 options lapse in February and decide on some more in a “few more months”.
The fuel-efficient jets will work in Qantas' favour despite the price of cruide oil more than doubling in the past two years.
“The way our hedging works – it typically puts a cap on our fuel expenditure and allows us to participate if fuel was to fall,” Joyce said in a Bloomberg Television interview Monday in Singapore. “And that’s actually helped us to be quite competitive. We are coping quite well with fuel at the moment.”
The airline reports first-half results on February 22 and has said profit may rise as much as 12 percent. Underlying profit before tax will be between A$900 million and A$950 million in the six months ended December 31, the carrier said in October. That compares with $852 million in the same period a year ago.
Joyce is plowing capacity into Asia, the fastest-growing travel market in the world, partly to tap a flood of Chinese tourists into Australia. He’s also rerouting the airline’s classic Kangaroo Route to London through Singapore instead of the Middle East.
Qantas is preparing to start the first direct service between Australia and Europe when it flies a Boeing Dreamliner from Perth to London in March. That’s a flight of about 17 hours.
Joyce, who led Qantas on a three-year turnaround after axing routes, jobs and costs, has also challenged Boeing and Airbus to make a plane that will allow Qantas to fly from Sydney to London or New York without stopping.
23 Oct 2014
Total posts 239
Sounds like a well thought through plan.
10 Jun 2017
Total posts 7
Gee, If Alan Joyce and his management team can't make a business case for replacing 747s with 787s then Qantas is in serious trouble. If that's the case, time for new management!
CX
05 Jun 2012
Total posts 127
Aren't you forgetting the alternatives? The 787 is MUCH smaller than the 747. 777s or A350s are much closer in size, and would seem to be a more natural replacement.
15 Sep 2012
Total posts 93
No we wont order them now, we will wait another 10 years! Then we weill get aircraft everybody else has had for years, promote them as something new, and watch every other airline operate new aircaft. We're Qantas!
16 Nov 2011
Total posts 580
Think the profit results speaks volumes.
24 Aug 2011
Total posts 1224
Sounds like they have a few issues with the existing fleet they are not 100% happy with and they want Boeing to address before further orders are forthcoming.
13 Sep 2016
Total posts 174
How on earth do you get "Sounds like they have a few issues with the existing fleet" from that? There's ZERO evidence of this, Qantas has had NO problems with the 787s, there's barely three in service! Once again "amrchair experts" looking for problems when the logical answer is very straightforward! Non-stop flights to Europe are central to Qantas rationale for the 787s. There is no drama over using them to replace old 747s so this is all about being sure enough passengers will want to fly from the east coast cities to Perth and then non-stop to London especially in he premium cabins where QF makes the most money. If that's not the case then the prospects for new non-stops from Perth to Frankfurt and Paris which Joyce has already said Qantas wants to do, the prospects for those flights will look dim and that would mean not as many 787s need to be ordered because those non-stop routes were designed with the 787 in mind.
04 May 2015
Total posts 261
Actually, Qantas has been experiencing a range of ongoing issues with their current 787s that they're keeping quiet about. Flights departing LAX typically depart at least an hour late each night for one reason or another even after the aircraft have been sitting on the ground all day (just look at the performance of QF96 in Flightradar or Flightaware...). In one case, electrical problems on board also resulted in power being cut to the refrigerators and the crew having to discard all of the cold catering, with passengers served only the snacks that weren't temperature sensitive. Plenty of reports on other websites about this.
Qantas - Qantas Frequent Flyer
28 Oct 2011
Total posts 467
Yes. but the main reason for the delays ex-LAX continues to be the late inbound of the flight from JFK with connecting pax. The 94 leaves on time, but the 96 is held for the connecting pax to MEL.
Qantas - QFF Platinum
20 Mar 2012
Total posts 211
Currently, I am fairly certain, all QF95/6 operations are via remote stand. Had a 40 min delay the other night due to errant passengers. Hardly QFs fault.
04 May 2015
Total posts 261
I took QF96 home from a holiday recently in the US and we had an aerobridge, but were delayed for around 90 minutes due to "engineering". Their on-time performance out of LAX is shocking, and my flight was but one of the many delayed departures Qantas has had there. If some of the delays are due to late inbound passengers because Qantas can't time QF12 correctly or doesn't allow enough turnaround time at JFK for it to stay on schedule, that's another problem, beyond the 787 issues Qantas has been having, that Qantas needs to fix.
QF
04 Apr 2014
Total posts 210
I've only flown 96 once since the 787 came online and we left from one of the gates in the main terminal building. Can't recall the number, it was one of the ones at the south (El Segundo) end of the building.
23 Aug 2014
Total posts 10
This makes sense. I mean why would he say they were going to rush in and get more 787's, given that it would look like the whole "get 8 and test them out" story would be out the window, and given that they don't need to announce the next ones yet? There's nothing to gain and everything to lose from diving in and announcing a whole bunch of 787's ahead of when you have to in this case.
12 Dec 2012
Total posts 1031
They do have things to lose. 15 options lapse soon. If they don't take those up, they are down to 30 options/rights and any new order past that is unlikely to get the cheap price they have for the current options.
Qantas - Qantas Frequent Flyer
01 Nov 2016
Total posts 130
The reason to wait must also have to do with the fact that Qantas is looking at real long range aircraft discussing this with both Airbus and Boeing. The first lot of 8 dreamliners is just a start with more new aircraft to come.
16 Nov 2011
Total posts 580
I am kinda with you. And at the risk of rising the ire of those that don’t like armchair experts I personally think the 787’s they have are stop gap fillers waiting for an aircraft to do Syd/Mel to LHR/US east coast non stop. When they come along the 788’s will join the 789’s at Jetstar which is where they belong IMO. Awful aircraft from pax perspective but gotta admire the technological advancement of the design.
Qantas - Qantas Frequent Flyer
28 Oct 2011
Total posts 467
No, where the 789s will end up is the Asian routes. A380 and 777-x to hubs in Europe, US, SCL, JNB ; 789 to everywhere in Asia/south Pacific and some long then routes in Europe and US.
Qantas - Qantas Frequent Flyer
23 Jun 2014
Total posts 10
Are the 787s certified to fly the SYD-JNB and SYD-SCL routes direct? I remember ETOPS used to be an issue, but that was some time ago. Upgrading from the 747s currently on those routes would be awesome. LA is flying direct MEL-SCL so I assume that certification issues have been resolved?
16 Nov 2011
Total posts 580
ETOPS wasn’t the issue it was CASA’s extra rules that limited routes they could used to those destinations. Not sure if that has been fixed but for what it’s with the 787 has max ETOPs rating.
10 Apr 2015
Total posts 14
Given that the SYD-SCL flight crosses NZ on the way and that AirNZ flies 787's from AKL to EZE, one would suggest there would not be a problem....
21 Jul 2011
Total posts 89
This lack of foresight is why NZ flies to more international ports than QF. Most global carriers have had this aircraft for years, inc OW ‘friends’ who are supposedly sharing info, so QF should know exactly what to expect.
Qantas - Qantas Frequent Flyer
11 Oct 2014
Total posts 688
It's a shame that NZ's alleged 'insight' didn't alert them to the multiple engine change problems they are working through on their current B787 fleet. Those HiFly emergency lease replacements and the B787 downtime costs must look really expensive right now?
30 Aug 2017
Total posts 32
Qantas - Qantas Frequent Flyer
31 Aug 2012
Total posts 212
@aniljak Do pay attention! That is happening now !
04 Dec 2017
Total posts 68
Go fix in your in-flight service, cabins and food before jumping the gun and ordering new planes. First is a fail food etc, Premium economy seat is a fail...A380 business seat is a fail, taking away premium lavs is a fail on the A330 and sharing in J on the A380 is a fail, ground staff and 'first hosts' and lounge in DFW all fails, taking away first lounges where there is a 'first' service in international ports is a fail. QF spend bit on plonk and grog to keep the masses happy....its all about the alcohol with QF everything else is very sub par.
16 Nov 2011
Total posts 580
But still making a very healthy profit.
17 May 2012
Total posts 80
Great to see Qantas has very good fuel hedging in place because so too are the fuel charges. Implemented when fuel was 100% more many years ago, gouging customers still the norm at Qantas.
18 Oct 2015
Total posts 27
I’ve heard a rumour from a friend & I have no reason NOT to believe it, that as late as Dec 17 Qantas had not been able to run PER-LON on the sims without a tech stop... just an interesting antidote given this news & Joyces Apparent skeptisicm...
Thai Airways International - Royal Orchid Plus
13 Jan 2017
Total posts 31
Anecdote, Timmy. Not antidote
18 Oct 2015
Total posts 27
Thank you, was on the phone, I can't seem to edit comments...
31 Mar 2014
Total posts 397
I am sure they will just block out a couple rows of seats and be all good. They probably can't make it with a full load
Qantas - Qantas Frequent Flyer
28 Oct 2011
Total posts 467
And on the sims, where are they doing the tech stop?
Qantas - QFF Platinum
20 Mar 2012
Total posts 211
Frankfurt, from what I’ve heard
Jetstar Airways - Qantas Frequent Flyer
23 May 2017
Total posts 17
Antidote and dositote and little lambs eat ivy!
30 Aug 2013
Total posts 438
How are they increasing capacity into Asia 'especially China' when they have not announced any new routes or equipment upguages to China?!
Qantas - Qantas Frequent Flyer
28 Oct 2011
Total posts 467
PEK is a fairly recent new route. And KIX. Sop there's two. To do more, they'll need more 789s.
Qantas - Qantas Frequent Flyer
20 Mar 2014
Total posts 132
i hope this means more A380s!
05 Feb 2018
Total posts 1
22 Dec 2012
Total posts 35
I suspect this is a negotiating tactic from Alan to either tempt Airbus into the ring or exact more concessions from Boeing.
10 Aug 2015
Total posts 122
Qantas only have 166 economy, 28 premium economy and 42 business. This is one of the least packed 787's around so you can't really say that in regards to Qantas.
Qantas - Qantas Frequent Flyer
17 May 2015
Total posts 54
I wonder if they will have a couple of different set ups....maybe one for short flights to Asia with more in it???
Qantas - Qantas Frequent Flyer
21 Jun 2017
Total posts 39
Hmmm... it’s only the ~600th 787 on earth, so not really road tested I guess (sigh). I wonder if Qantas PC desktops are as up to date as their planes? If so, is someone in Qantas IT saying “hang on, lets get vista bedded down and then we’ll see how we go?” Prob the same team who didn’t think to incorporate wifi “domes” in their long haul fuel calc... bitcoin, wifi, internet.... pffft fads that won’t last. :)
05 Feb 2018
Total posts 1
You make your money on Cargo and all the 747's are going out with a full cargo load.
Qantas
19 Apr 2012
Total posts 1429
The strategy seems to be working and Ariel is are now staring to push manufacturers hard on after sales service el-Baktir and Qatar as an example. The teething problems with the A380 was another case in point. The lesson is don’t buy more until you areahppy with the current lot otherwise you just get had. The increase to Asia is very obvious with the move to fly A380s there. The issue with China is that the Chinese wont fly non Chinese airlines and Australians are not flocking to China but the story with Singapore, Japan, and Hong Kong is quite different. Also slots are hard to come by. I can see QF using an A380 to the new Bajing airport when it opens in 2019.
21 Jul 2014
Total posts 8
Or they just want to make Boeing sweat a little more and come to the table with a real B747 replacement in the 350+ seater category.
Qantas - Qantas Frequent Flyer
17 May 2015
Total posts 54
But “Qantas”has had the 787-8 for a number of years with Jetstar. They know what the machine will do. They will order more and everyone knows it.
21 Jul 2014
Total posts 8
I know they will order more QF is just waiting for the PER-LHR service to kick off then they’ll evaluate the data. JQ don’t operate ULH routes, QF will be one of the 1st carriers to push the B789 to the envelope.
19 Jan 2018
Total posts 87
The negativity in this thread is astounding.
Qantas - Qantas Frequent Flyer
11 Nov 2015
Total posts 38
This is Qantas playing its hand with the duoopoly of Boeing and Airbus. I would expect them to screw the factories as hard as there can...
10 Jun 2017
Total posts 7
By the comments, I'm not sure that most of the posters here are aware that the 15 Options that they had were at a price so low, that giving them up to 'bargain between manufacturers' is non-sensical. When QF signed the deal, those 15 airframes were going to be delivered at less cost than any other airline that has subsequently ordered them. Maybe QF have looked and decided that they don't need 53 in their fleet, and 38 is a better mix. Maybe they are looking at the 777X. But what is a fact, is that if they are going to take up the 30 purchase rights they have remaining, then it is at a higher cost than the 15 Options that they have just dumped. So, I say again, with the data already available, how is that this Management team can't make a business case for a jet that has under half the fuel burn of the ageing 747s?
16 Nov 2011
Total posts 580
Half the burn and half the capacity of both two legged cargo and underfloor cargo. I am certain management knows what they need to do to keep their shareholders happy.
12 Dec 2012
Total posts 1031
I'm seeing some reports that they haven't lost the 15 options that are lapsing, they just lose the space in the queue.
(also a report that QF are shifting A380 heavy maintenance from Lufthansa Technik to Emirates Engineering - starting with repainting 8 of them from March)
16 Nov 2011
Total posts 580
Options are for spaces in the queue. They can of course trade them.
11 Dec 2015
Total posts 85
Makes you wonder whether Qantas is re-evaluating the 787 with respect to other aircraft on the horizon, namely the 777-x and 797.
16 Nov 2011
Total posts 580
I think you are on the money. Me personally the current lot are (cheap) stop gap fillers that are waiting for an aircraft to come along that is genuine 747 replacement. With the current 789’s to find new roles in a few years time. I am placing an early bet they will become silver in colour in about 5-10 years time.
Qantas
19 Apr 2012
Total posts 1429
Trogdor they may be able to get the 78-10 which is the plane for Asia at or near the exisiting contracted prices. The proposed 797 won’t have the legs to get to north Asia or even to Bangkok.
11 Dec 2015
Total posts 85
patrickk - last I saw Boeing was talking around a 9,000 klm range for the 797, which would happily do most parts of Asia from the eastern capitals
Qantas
19 Apr 2012
Total posts 1429
Interesting if it is that great in range then its weight might disadvantage it vis a vis the A321 and its range is mighty close to the 78-10; which may mean its competing with itself. An interesting balancing act for Boeing.
11 Dec 2015
Total posts 85
True - that balancing act is probably why it has taken so long to replace the 757.
23 Oct 2014
Total posts 239
Qantas may have thought they would have the domestic wide body / business market to themselves back then and prob factored this into their initial order, with 15-20 787-8 for domestic to replace 767 and 330. They could continue to charge elevated prices and monopolise he freight market making the “numbers” look fantastic on an oversized and over”weight ” aircraft for domestic. Times / market has changed prob no need for heavy aircraft on transcon / domestic as QF cannot extract the “capital return” they desire from domestic customers. Therefore maybe a reduced need for 787’s.
16 Nov 2011
Total posts 580
Good to see someone has a memory that Qantas initially had no plan for 787 international operations. The original plan was 788 to Jetstar, then 789 to Jetstar with the 788’s coming to replaces the 767’s domestically in Qantas colours.
12 Dec 2012
Total posts 1031
The original order in December 2005 was for 115 aircraft.
65 firm orders, 20 options and 30 rights. (and at the time, they expected to have 28 in service across Qantas and Jetstar by December 2011 with the first 4 arriving in 2008).
Then between 2009 and 2012, they cancelled 50 firm orders, leaving 15 for JQ, before cancelling 1 more in 2013.
Finally in August 2015, they converted 3 of the JQ aircraft to QF (leaving 11 for JQ) and firmed up 5 options.
Virgin Australia - Velocity Rewards
15 Aug 2012
Total posts 171
Aviation is a complicated business with many moving parts. Alan Joyce and his team is privy to a lot more data and information than any of us here.
24 Oct 2010
Total posts 2563
Well said, SteveCF.
Qantas - Qantas Frequent Flyer - Chairmans Lounge
01 Sep 2011
Total posts 416
Well said. There's often way too many "experts" on here. One wonders why they're not heading up an airline. They seem to know it all.
Singapore Airlines - KrisFlyer
24 Feb 2016
Total posts 18
You've forgotten that he nearly drove the airline into the ground with his ridiculous capacity war with VA? How short people's memories have become.
Virgin Australia - Velocity Rewards
15 Aug 2012
Total posts 171
No short memory, just realistic that aviation is a complex business.
Qantas - Qantas Frequent Flyer
22 Jul 2015
Total posts 219
Not sure I'd want to be in a 787 - 9 for the long treks to Nth America. Tried it on an AA 787 9 from LAX to Sydney and definatly missed the lower noise levels and space of the 380
21 Jul 2011
Total posts 89
I did it from AKL LAX and loved it. J was fantastic and I noitcied the lack of jet lag after compared to the 380 or 744
09 Jan 2016
Total posts 43
Hope the economy cabin is empty every flight, so they get the msg that 17” wide for 17 hours is NOT acceptable!
Qantas - Qantas Frequent Flyer
18 Jul 2015
Total posts 27
perhaps reduce the seats, increase the toilets and the cargo capacity?
11 Jan 2017
Total posts 11
Unfortunately there is no F on these aircrafts. 6-9 hours to SE in Business cabin is ok. However, 17 hours in that Business suite is too torturing. Flying to Europe on EK (QF ticket) via DXB or BKK, or QF via DXB or SIN are much preferable.
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