Qantas may cancel aircraft deliveries? Let’s do the math.

Qantas 787.jpgBoeing image of a Qantas 787, released at the time of the company’s order.



The prospect of Qantas culling kangaroos in the form of new aircraft deliveries warrants a closer look.

As Qantas chief executive Alan Joyce told The Australian, “everything is on the table” when it comes to reviewing the airline’s loss-making international operations, including aircraft deliveries. “We have to review the capital we are putting into it because the business is not performing.”

Joyce makes clear it is aircraft destined for its international operation that could face the axe. So Qantas’s outstanding order for Boeing 737-800 aircraft, 23 according to Flightglobal’s ACAS database, are safe, as to be expected since the carrier is selling its 737-400 fleet. The 44 A320s on order for Jetstar are also safe.

That leaves the A380 and 787 deliveries on the block. But Joyce told the Australian the carrier will take fully delivery of its 20-planned A380 fleet, so the remaining 10 A380s face no risk. As for the Group’s 787s, the first trove of deliveries, 787-8s, will go to Jetstar from 2012. As 787-9s come off the Everett and/or Charleston lines around 2014, they will be delivered to Qantas and Jetstar, who will then send its lower-performing 787-8s back to Qantas for domestic use where payload and range restrictions are not as significant.

Jetstar desperately needs the 787s to profitably open up European routes from Singapore since it faces competition from AirAsia X, who is looking at serving more European cities from late next year, and Singapore Airlines’ new LCC. It will also need the 787-9′s better performance, so it is implausible to see cancellations on the initial batch. While later 787s could theoretically be cancelled, as Qantas did in 2009, one hopes that by 2014 Qantas has its international operation in order and needs the aircraft. If not, Qantas would still be pressed to relinquish undoubtedly a steal of a sale: a 787 for less than US$76 million.

So Qantas cutting aircraft? Unlikely.

Hot air to bring the unions to table? Likely.

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