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QANTAS cancels order for B787, posts first loss in 20 years,

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QANTAS Airways management today announced a shock $244 Million AUD loss for the financial year, citing higher fuel costs, transformation and industrial disputes as factors.

 

It is the first time the airline has post a loss since it privatised in 1995.

 

By comparison, in the previous financial year, QANTAS declared a profit of $250 Million AUD.

 

QANTAS also declared its international operation was the only part of the QF Group to post a loss ($450 Million AUD), and thus decisions need to be made.

 

The most significant, is the cancellation of the ordered fleet of 35 Boeing 787 Dreamliners, worth approximately $8.5 Billion dollars.


Will Reynolds

 

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Just to clarify, the cancellation is for the fleet of Boeing 787-9, the order for the 787-10 has been pushed back to 2016.

 

According to Financial sources, this cancellation will mean refunds of around $433Million AUD from Boeing to QANTAS


Will Reynolds

 

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There are some happy customers getting their airplanes early now.


Chris Miller

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"Fifty B787-9 options and purchase rights will be retained and brought forward by almost two years, available for delivery from 2016" the airline said in a statement.

 

The idiot Alan Joyce is destroying QANTAS while the travelling public enjoy their cheap cattle truck airfares on Jetstar(whom are outsourcing everything from maintenance to pilots and crew)

"An Australian airline" yeah right get stuffed


Cheers Josh Cliff

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Yes, of course.. blame the Irishman. Nothing to do with a $600M+ increase in fuel price. There are a pile of legacy carriers in all sorts of bother around the world, and somehow QANTAS should be immune to that?


Mike Dryden

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He is the CEO right???

How much fact do u want than yesterday's announcement?

Lets go with the admins salary increasingly by 82% in the last 2yrs (whilst the airline losses money)

Or the he deffered an early order of 787 which possibly would have been close to delivery now

Or more deffering of the A380 which is QANTAS's "flag ship"

All while Jetstar gets the 1st 787's and has seen great growth in asia...

Thats only scratching the surface! I suggest you catch up on some reading

 


Cheers Josh Cliff

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None of what you listed would turn around that loss. What's the point in buying planes you can't fill because bigger overseas airlines are taking a greater portion of market share in a deregulated market? That's catch-22... the fleet gets older and less attractive to the travelling public. But that issue has been around longer than the four years Alan Joyce has been at the helm. Then again, first 787 deliveries were supposed to be in 2008... And there is the 777 question, when Mr Joyce was still in Ireland. Why is JetStar growing? Because people don't want to pay as much as they would on a full service carrier but will put up with the 3" seat pitch maybe? Imagine what would have happened if JetStar wasn't there to add to the coffers.


Mike Dryden

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But that issue has been around longer than the four years Alan Joyce has been at the helm. Then again, first 787 deliveries were supposed to be in 2008... And there is the 777 question, when Mr Joyce was still in Ireland.

Just to point out here, he left us in Aer Lingus in 1997 I think, and went to Jetstar as the CEO*?*, so he probably did have a hand in porting of of business to jetstar and would have been involved with Qantas managment from there out... So while he may technically have been at the head of Qantas for all that time before '08, he was damn near close.

 

Regards,

Ró.


Rónán O Cadhain.

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He started with QANTAS in 2000 after a stint at Ansett (from about '96 I think...), and headed JetStar from 2003.


Mike Dryden

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He started with QANTAS in 2000 after a stint at Ansett (from about '96 I think...), and headed JetStar from 2003.

Right, so basically 12 years at or close to the helm...


Rónán O Cadhain.

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Wow, that sucks. But, how come Boeing charges airlines if they don't even have the airplane built for them yet?

 

The same way you pre-order a piece of software, though I'm guessing Boeing just asks for a down-payment, not the entire amount.


John-Alan Pascoe

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So if buying new planes isn't the key to overall travelling public approval, Why is there soooo much investment in Jetstar?

Jetstar turns profits because so much of what they do is out-sourced, Its disgraceful that a Australian airline can do this.. Look at some of the JQ fleet with oversea's registries on them with foreign crew..

And yes I do realise QANTAS do this to with "Jet-connect" but its only 1 fraction of what JQ are doing and are capable of...

 

Ok if my points weren't that valid how about you throw in the the grounding of the QANTAS fleet stunt called on by???????????

You guessed it ALAN JOYCE.. What was the figure thrown on that stunt???

How much was paid out to people missing connections, cancelling holidays, be stuck O/S and all the other freight loads missed..

But hey on the other hand like you said earlier with regards to rising fuel costs, The may have saved a few $$$ with nothing flying and of course no damage was done to their reputation either huh....


Cheers Josh Cliff

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Jet star is succeeding because it offers cheaper fairs and that's what the customer demands, if Qantas were priced the same as jetstar then they'd be getting the customers in, but they're not. It's the customer who decideds. We had the same thing in Europe, some of us have adapted, and some of us have gone broke, and some are on the verge of going broke. Qantas is trying to adapt, but not quickly enough, it needs to lower its cost base and up its competitiveness or it will fail that's business. Qantas has an advantage in that is has the A380 for its long haul route which is one of the most fuel efficient aircraft out there which should place it well against its competitors but they have to get their other costs in line before that can happen...

 

Regards,

Ró.


Rónán O Cadhain.

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So if buying new planes isn't the key to overall travelling public approval, Why is there soooo much investment in Jetstar?

Jetstar turns profits because so much of what they do is out-sourced, Its disgraceful that a Australian airline can do this.. Look at some of the JQ fleet with oversea's registries on them with foreign crew..

And yes I do realise QANTAS do this to with "Jet-connect" but its only 1 fraction of what JQ are doing and are capable of...

 

Ok if my points weren't that valid how about you throw in the the grounding of the QANTAS fleet stunt called on by???????????

You guessed it ALAN JOYCE.. What was the figure thrown on that stunt???

How much was paid out to people missing connections, cancelling holidays, be stuck O/S and all the other freight loads missed..

But hey on the other hand like you said earlier with regards to rising fuel costs, The may have saved a few $$$ with nothing flying and of course no damage was done to their reputation either huh....

 

Mmmm...not quite....Allan Joyce worked in Finance for Qantas before he was picked the head the low cost carrier to compete with Virgin Australia. Gotta say he did a good job, he set up what was needed for the task at hand.

 

Qantas, in the meantime, headed by Geoff Dixon, was sinking and nobody did a thing about it. There was a reason why in 4 years, every single Board Meeting held by Qantas was held at a different overseas destination....why? so no shareholder would be present. If this attitude does not ring alarm bells, nothing will.

 

Dixon left and Joyce was moved to Qantas...I do not envy him. He inherited a total disaster. Since the Liberal government years ago opened Australian skies to overseas carriers, the "protection" that Qantas had was removed, and Qantas was forced to compete directly against carriers on the same route but with a much lower cost base.

 

There is no way QF can compete against Middle East carriers, or even neighbouring carriers on a flight per flight basis...so what to do?

 

Qantas has 3 heavy maintenance bases in Australia...absolutely crazy....they are going to shut 2 of them to save costs. Maintenance of aircraft costs a lot less for other competitors than it does to QF, this is why the 737s are maintained elsehwere, but the 767s and 747s are still maintained in Australia.

 

Joyce inherited a Qantas International operation that has not made a single profit in years, and it is likely to remain that way unless things change. You cannot continue to make a loss forever. To top it all you had the industrial action paralysing Qantas just about every month by union employees demanding salary increases and job assurance. The things the airline can least afford to give. Qantas employees are the highest paid airline employees in Australia as it is. Qantas's domestic operation is quite profitable, as well as its frequent flyer programme. Jetstar is very profitable as well.

 

So what to do? You have a loss making international airline that cannot afford to lower its prices because it is losing money hand over fist, competing directly against other carriers who don't have to deal with ridiculous union labour demands, much lower salary base, lower cost, less taxes to pay and they have not shown total lack of vision in past management teams.

 

Change is needed, or it will be yet another aviation icon to disappear from our skies.


Will Reynolds

 

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