Qantas to refresh two Boeing 747s

Lee, While I agree the Rockwell Collins IFE is horrible -- there is no way QF is going to spend the money on a plane they will retire within 18 months, hence the minor mostly soft (cushions and seatcovers)

Because if they buy the cheap A380 they have to keep it and they don't want it. This is not a major or significant fleet announcement. It is sprucing these things up just enough to keep them going for an extra 18 months, in circumstances earlier thought unlikely viz such low fuel prices. They have an unexpected combo of low fuel and demand on these secondary routes so they will kick the two old 747s along a little longer is all. 

Understand that it's a cheap fix… why not do it a non cheap way for once…… if they didn't cxl all there 788 orders and send what was left to JQ they would be in front of the competition now..... Now they are scrambling to get ahead... We saw the same cheap fix with the 767, spending a lot of money to give minimal customer experience and for a short time... Think ahead better is what I'm saying, and er on the side of better not worse. 

I'd say an underlying PBT of $921m puts them ahead.

<<why not do it a non cheap way for once>>

Because QF needs to be financially prudent /realistic for once.  In case U've forgotten the widely publicized financial news & reports re QF Group, QF Int'l op was seriously bleeding red ink just 24mths ago and was still on survivial mode just 12mths ago.

<<if they didn't cxl all there 788 orders and send what was left to JQ they would be in front of the competition now>>

Actually, if QF didn't do all that, they would likely be on the brink of financial collapse /insolvent.  At the minimum, QF int'l op would be significantly cut /downsized.

<<Now they are scrambling to get ahead...>>

Now QF is finally profitable if U care to read their most recent financial reports & strategic plans.

<<Think ahead better is what I'm saying>>

Think ahead better in a financially sustainable way is precisely what Alan Joyce has been doing over the past 2-3 yrs to turn QF around....which he has done as promised.

<<..on the side of better not worse.>>

Some may think QF is offering worse not better product these days, however, QF is clearly in much better financial health today, not worse. 

moecat the first orders of the 787 were ALWAYS going to Jetstar. they just deferred their first orders of the 787-9.

The money spent on the 767's was worth it, and the biggest cost - iPad streaming was removed to reuse elsewhere. 

Given the high utilisation of the A380 i doubt it will be seen going to JFK anytime soon.

I doubt JFK wants to see many more A380s. IIRC, every time an A380 moves around JFK, they have to shut off large parts of the airflield around it and get the traffic guides out.

MH have recently announced they are now keeping all six, and indeed refurbing them to add an Economy Plus cabin

While the MAS A380s have RR engines, they are a different type (Trent 970 vs 972) and don't have the thrust levels QF requires for the MEL-LAX and SYD-DFW flights. If they picked up some MAS 380s, they'd need to swap out the engines (which would be quite costly). There are also other A380s sitting around in France complete or near complete (eg, 2 meant for Skymark which ANA seems not to want even though they ordered 3).

QF currently has 8 A380s on confirmed order and another 4 options. If QF wants more A380s, they just need to ask Airbus to move ahead with some of the confirmed orders.

You would not have to "change out the engines". Not really!

All aircraft engines of same base spec are capable of the same thrust, all that would be required to be changed, is the Thrust rating plug on the ECU (Engine Control Unit)

Very true especially across similar varants of a single engine family like the Trent 900 onboard 380.  To turn a T970 into a T972 essentially involve only 2 steps:

1) Pay RR a premium for the higher thrust rating(i.e. Turbofan pricing is largely based on installed thrust level upon delivery).

2) Aside fm the rating plug changes, tweak the software in the ECU so the same engnie can run @ higher EPR(Or RPM in layman terms) to generate higher thrust before hitting the raised redline.

Of course, maintenance interval and may be procdure too will be slightly altered due to higher op temperature+pressure.

Interesting how folks consistently failed to spot the significant reduction in fuel surcharge vs level only 2-3yrs ago especially on  longhaul flights.... 

Also equally interesting to note the current huge disparity on 'carrier imposed surcharges' between Virgin & QF on Frequent Flyer redemptions for identical overseas ports.

The current fall in the cost of fuel is a phenomenon that is less than 12 months old - and the recent 'reductions' (not disputed) you allude to dropped a percentage of these costs. It did not eliminate them.

IMO, it is not unrealistic to consider that this subject could / should be revisited and re-evaluated by QF, as mrmaxwell has suggested.

Why do you think they might be delayed? Boeing 787 production is in full swing and they increasing production rates. They have 2 production lines in operation. Unless Boeing has a major problem, I don't see the 787 being late.

As long as the seats don't come from Zodiac Aerospace (which has caused delays for AA and AF), there shouldn't be an issue from there either.

I have no idea if it's delayed. I'm just posing a question and not taking the news at face value. From the number of dislikes it appears people are getting their knickers in a twist. 

"I'm more interested in the sub text. Is this a tacit admission that the 787 deployment will be delayed?"

Nope. On track from end of 2017 as planned.

"Is the installation of plump cushions and new carpets a distraction - a positive spin?"

No, just a 'small' but sensible investment considering these planes were a few months away from retirement, now they'll be okay for perhaps another two years.

Thanks for the clarification David. 

Alternative theories fm a practical op angle re the so-called 'sub-text' or 'positive spin':

1) This seat cushion project is simply to bridge the gap fm now till SUFFICIENT 789s can be deployed on current routes served by this pair of 744:

1st 789 for QF will indeed be delivered before End17 per schedule.  However to park a pair of 744 permanently, QF needs @ least 789 x3 to be ready for op(1 for spare/backup) and that means a time frame closer to mid18 or over 2yrs fm now accounting for basic inspections+crew trainings+op familiarizations on shorter noon-744 rotues post-delivery.

2) The seat cushions+carpets on that pair of 744 are simply overdue for replacement a few mths from now anyway:

Some folks may not realized that seat cushions+carpets can be worn out pretty quickly and it's not uncommon for carriers to replace them every 3-5yrs.

3) QF may want to retain the option to increase fleet capacity cheaply/opportunistically thru flying this pair of 744 a bit longer even AFTER 789 delivery:

Over the past 1.5yrs, QF lnt'l op traffic data hv consistently been pointing toward a modest upward trend in demand slightly beyond their projections.  If that continues and oil price remain low, QF may want to delay retirement slightly for @ least some 744s.....to meet charter style demand fm China in the near future thru low cost/largely depreciated assets is an example.

Thanks FLX, appreciate the substantive analysis.

Let's be truly honest here. First, these birds are effectively owned / paid off for QF and with the dramatic fall in the cost of oil, they would be crazy to retire them now. Two years will see them closer to their 'D' checks - which would be when the heavy expense kicks in, so in a low cost fuel environment, it makes sense to keep working them.

You can also add to that - with the A380-800 fleet stretched to it's absolute maximum, these two older aircraft provide a more flexible backup solution when an A380 goes tech. And that has happened a few times in the last 3-4 months. To whit, the recent engine change in LHR which resulted in an awkward couple of days for the A380 and some tricky flow-on effects.

Interesting analysis. Thanks kimshop.