Qantas has scrapped its order for 35 Boeing 787-9 Dreamliners after posting an Aus$244 million net loss for fiscal-year 2011-2012, which ended June 30. Alan Joyce, CEO of Qantas Group, called the cancellation of the $8.5 billion order “a prudent decision” and said it’s key to returning Qantas to profitability, the target of the carrier’s five-year restructuring plan.
“The B787 is an excellent aircraft and remains an important part of our future,” Joyce said in a statement. “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 will still forge ahead with the deliveries of 15 B787-8s for low-cost carrier Jetstar, which recorded an underlying EBIT profit of Aus$203 million in fiscal-year 2011-2012, a 20 percent, year-over-year, increase. According to a press release, the 787-8s are slated to arrive to Jetstar in the second half of 2013 and will result in the transfer of Jetstar’s A330 aircraft to Qantas’ domestic fleet. Qantas will then retire its Boeing 767 fleet at a later date.
Joyce defended these actions, stating that they showcase Qantas’ commitment to “disciplined capital management.” “We have the right fleet strategy to deliver continued customer satisfaction and position us for sustainable growth over the long term,” Joyce continued, “while enabling us to retain flexibility and manage our capital requirements appropriately.”
In the press release, Qantas said that the total cash inflow from the restructuring plan will amount to $433 million, with $355 million coming in fiscal-year 2012-2013.