Qantas almost certainly won't order all 45 Boeing 787s

Qantas almost certainly won't order all 45 Boeing 787s

Qantas is unlikely to pull the trigger on its full set of 45 orders and options for the Boeing 787, but the airline is open to adding the new Boeing 787-10 into the mix.

Qantas Group Alan Joyce has previously said he’d like to take all 45, enthusing "I'd like to order all of them if I can make a good return out of them, but now sees a different path ahead – one which means fewer Dreamliners in the fleet.

The size of the initial order, which stretches back to 2005, reflected Qantas’ intention to have the Boeing 787 replace the Airbus A330 on domestic routes.

But Joyce no longer plans to put the Boeing 787 onto domestic routes, he told Australian Business Traveller on the sidelines of the delivery of the first Qantas Dreamliner in Seattle last week.

"Our thinking has evolved... while the 787 as with the A330 are pretty powerful they are over-spec'd" for domestic flights, "so the economics do not work."

Instead, Qantas will revamp its domestic fleet from the mid-2020s with either the advanced Boeing 737 MAX or the Airbus A320neo and the yet-to-be-built mid-sized Boeing 797, which would also pick up some flights into south-east Asia.

Read more: Qantas eyes Boeing 737 MAX, Boeing 797 for domestic fleet

So where does that leave Qantas' 45-strong order book for the Boeing 787?

“These are going to be great aircraft and we're going to want to take quite a lot of them over time (but) I don't think we're going to need (all 45),” says Qantas International CEO Gareth Evans, the former Qantas Group CFO who, after 2½ years heading the airline’s international arm, moves into the orange hot-seat at Jetstar next week.

“We’ve got eight for Qantas plus 11 already in Jetstar, plus another 45 which is more than enough,” Evans told Australian Business Traveller in Seattle. "I don't think we're going to need that many.”

Qantas will consider a second tranche of Boeing 787-9 deliveries from late 2019 or early 2020, with Paris and Germany already pencilled in as likely European destinations.

“Because of their size and flexibility there’s also great potential for Asia as well,” Evans said.

Evans said that Qantas could also sign up for the Boeing 787-10, which launches in early 2018 and can carry more passenger than the 787-9 over a slightly shorter range – although one that’s still sufficient for high-demand routes such as Sydney and Melbourne to Singapore, Hong Kong and Tokyo.

“We've got a very flexible order stream so we can decide what we take and when (with) the ability to flick between 787-8’s for Jetstar and -9s or even -10s for Qantas,” Evans allowed.

“It's obviously all got to be balanced and the business case has got to stack up, but with Boeing there's lots of flexibility to move those things around.”

David Flynn travelled to Seattle as a guest of Qantas

David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
 

34 comments

  • Simon Frost

    SimonFrost

    28 Oct, 2017 04:26 pm

    Cue the inevigrizzling about 737’s on the cross country routes....
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  • StudiodeKadent

    StudiodeKadent

    28 Oct, 2017 08:39 pm

    QF might use the upcoming 797 for transcon, or it may equip a subfleet of narrowbodies with a premium configuration for that.
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  • Himeno

    Himeno

    31 Oct, 2017 11:16 am

    Are you thinking something like the premium heavy 3 class AA A321 Transcon?
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  • patrickk

    patrickk

    28 Oct, 2017 05:35 pm

    I have always thought the 78-10 is the perfect (but cramped) replacement for the A333, much same range and size, and can reach most ports in East and North Asia from most ports in Australia.
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  • kabe100

    kabe100

    28 Oct, 2017 08:46 pm

    " replacement for the A333, much same range and size"
    You are correct on the range comparison but wrong on the size. 787-10 is way bigger than A333.
    B787-10 is 16 feet longer than A330-300 while having a similar cabin width.
    But B787-9 is similar to A333 in size.
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  • patrickk

    patrickk

    29 Oct, 2017 08:41 am

    Kane not sure ‘way bigger’ my reading says about 10% bigger 330 vs 300 seats, and the A333 is about 10% bigger than the 789. The A339 a NEO version closes the gap on fuel efficiency and range with the 79-10, so an interesting competition. QF though will stick with the 78-10 given the very low price it has secured.
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  • FLX

    FLX1

    30 Oct, 2017 08:13 pm

    @patrickk:
    "..my reading says about 10% bigger 330 vs 300 seats, ..."
    If simply "reading" 78J vs 333 brochure specs then the math appears correct @ 10% indeed.

    In reality and as measured by airline fleet planners/analysts, usable cabin floor area for seats on 78J is beyond 15% larger than 333/339(except for Y in 9abreast).

    "A333 is about 10% bigger than the 789"
    Even with the simplistic brochure values, I still can't get 10% diff in seat count:
    333 =300seats
    789 =290seats

    In reality, usable cabin floor areas for seats on 789 and 333/339(except for Y in 9abreast) are practically identical.
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  • FLX

    FLX1

    30 Oct, 2017 07:57 pm

    @kabe100:
    "You are correct on the range comparison..."
    Correct only if an apple vs orange comparison can be considered correct.

    Per specs published on Airbus/Boeing online brochures, nominal ranges for 333(Only the latest 242t MTOW version in which QF has none) and 78J are only within 1.3% of each other...this is typically where the misunderstanding originated for many folks. However, Boeing use significantly more stringent longhaul mission config load assumptions than Airbus since about 3~4yrs ago when both revised their cabin config assumptions to more closely reflect real airline op realities today for calculating nominal range. Both used to be very close to each other in their cabin weight assumptions(Completely out-dated though when they still assumed e.g. F/J seat was a recliner @ 61"/39" seat pitch...) but not any more. 3 examples:
    a) Boeing assume heavier weight per pax+bag than Airbus.
    b) Boeing use flatbed+direct aisle access(i.e. heavier per seat) with @ least 74" pitch for every J seat while Airbus use angled/ski slope J seat pitched @ 60" without direct aisle access(i.e. lighter per seat).
    c) Boeing account for weight fm the standard crew rest compartments(located above main deck and 99% customers hv it) on 787 while Airbus don't because it remains as an optional removable module on 330(located below main deck consuming 4 LD3 positions).

    In a nutshell, brochure ranges for 78J and 333 may superficially appear similar but their cabin config load per pax are very diff fm each other.

    "B787-10 is....than A330-300 while having a similar cabin width."
    If the cabin width of 787 and 330 can be considered "similar", then by the same logic, cabin width of 787 and 350XWB are nearly identical. Cabin dimensional specs on cert documents(not brochures) for aviation regulators:
    330 =204inches
    Not even accounting the attic/concave style cabin side wall which reduces usable cabin width @ armrest height.
    787 =216inches
    350 =221inches
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  • Andrew Mcgarry

    Jflyer

    28 Oct, 2017 07:41 pm

    You could use the Perth - Melbourne leg on the 787 to avoid the 737 business class.
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  • Shoudy Chen

    Shoudy Chen

    29 Oct, 2017 12:17 am

    I Think that qantas should replace the a330-303s with b787-10s. B787-10s have the same range and will have the same pax configuration. They can open up some new destinations such as Seoul, Mumbai, Ho Chi Minh. I feel that qantas will need to revive routes such as Perth-Hong Kong And perth-Tokyo.
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  • GregXL

    GregXL

    29 Oct, 2017 12:28 pm

    The Perth market would be well served by Qantas cooperating with Cathay and JAL for Perth-Hong Kong and Tokyo. For example a daily service for each of QF and CX at different times to Hong Kong would be an improvement over the current schedule. There are several reasons this won’t happen, including poor relations between QF and CX and the low priority of the Perth market for QF.
    The state government in WA is getting publicity for its efforts to promote travel to WA and may succeed with JAL. Once this happens it would be tough for QF to re-enter Perth-Tokyo independently.
    The state government should be pushing to remove Perth from the agreement that limits CX flights to Australia. It provides no benefit to WA

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  • Himeno

    Himeno

    31 Oct, 2017 11:28 am

    QF isn't allowed to cooperate with CX/JL on AU-HKG/JP routes. The ACCC won't let them. Not enough competition on the route to allow a QF/CX, QF/JL agreement.

    That's why QF/JL codeshare between JP and AU via SIN and used to codeshare on PER-NRT (QF op) and BNE-NRT (JL op), but not SYD-NRT (both).

    If the WA government wants more CX flights to the state, then they should work to open up other WA ports. The only airport in the state that CX can't fly to (without cutting other flights to AU) is PER.
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  • GregXL

    GregXL

    31 Oct, 2017 01:48 pm

    Yes I know of ACCC issue, however, in the current situation, there is no competition on PER-HKG direct because there is only one operator. If you consider indirect services there is plenty of competition and this would continue if QF and CX cooperated to provide a better customer service on the direct route.

    Flights to ports in WA other than PER struggle to be viable. Recent efforts to establish KTA-SIN seem to have been unsuccessful. My point is that including PER in CX's quota of flights to AU disadvantages PER. Most of the traffic that is not on CX is shared between other Asian carriers and not QF or VA (except for a small number of cases where people will travel via eastern AU cities).

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  • FLX

    FLX1

    30 Oct, 2017 09:49 pm

    @Shoudy Chen:
    "...qantas should replace the a330-303s with b787-10s. B787-10s have the same range...."
    But they won't "have the same range" as soon as QF apply the same real QF mission cabin weight/config assumptions across these 2 types.....and QF does not even hv any 333 variant @ 242t MTOW(i.e. the latest takeoff weight available which enable that nominal range figure we see on 330 online brochures @ airbus.com today in the 1st place).

    "They can open up some new destinations such as Seoul.."
    Even most current QF routes to E.Asia significantly beyond 8hrs block time will gain lift capabilities fm 78J over the current QF 333 such as SYD-KIX/PVG/MNL/HKG/BKK and BNE/MEL-NRT. Take the crew rest area for example:
    1. Range performance on 78J brochure already accounted for weight fm the standard dedicated crew rest compartments(There're 2, 1 for pilots and the other for cabin crew) above main deck cabin. Not the case re 333 brochure so if an operator use the optional 330 crew rest module below main deck(Branded as LDMCR-Lower Deck Modular Crew Rest by Airbus), its weight will deduct fm 333 brochure range performance.
    2. Most jurisdictions start to mandate dedicated crew rest area fm 8hrs block time such as all QF routes listed above. A bit of flexibility/exemptions granted by crew unions do exist for some operators to simply block off pax seats for crew use but this also mean those 300seats on 333 brochure can no longer actually carry 300pax. When sectors hit 9hrs & beyond, even the most friendly unions(except perhaps S.E.Asian longhaul LCCs...) would mandate exclusive crew rest compartment and QF crew union likely demand this long before their 333s reach 9hrs.
    3. Each LDMCR can accommodate upto 8 persons but consume 4 LD3 spots in the 330 belly. Given that a 333/339 has a max of only 32 spots for LD3, only 28 LD3s(only 20 for 332/338) will remain for pax bags+Rev$ cargo. In contrast, a 78J has 40 LD3 spots and none is needed for crew rest For a typical QF Asian route @ 9hrs or beyond, a 78J offers about 40% more Rev$ cargo capability than a 333/339 and we all already know E.Asia mkts hv a huge+rapidly growing appetite for Australian fresh farm+seafood air freights....

    All of the above are part of the reasons why it makes econ sense for QF to 'abuse' 789, designed for far longer missions, on many Asian routes even without the 78J.

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  • moa999

    moa999

    29 Oct, 2017 02:00 am

    Qantas has too many options on both the 787 and A380, both at good prices.

    How this will translate into 737v320 and 777v350 will be very interesting.
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  • FLX

    FLX1

    30 Oct, 2017 09:59 pm

    @moa999:
    "Qantas has too many options on both the 787 and A380, both at good prices."
    I don't think we need to worry about 380 options held by QF till 2030 or beyond. Unlike the 787 order, even the remaining firm QF order still officially on Airbus backlog for 380 x8 has been delayed indefinitely by AJ yrs ago....
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  • Himeno

    Himeno

    31 Oct, 2017 11:33 am

    QF has 8 A380 orders and 4 options remaining. They also have a large number of A320s (both normal and NEO) on order (currently meant for JQ/GK/3K/BL).

    The original QF group 787 deal was for 110 aircraft in a mix of orders, options and rights.
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  • FLX

    FLX1

    31 Oct, 2017 07:45 pm

    @Himeno:
    "The original QF group 787 deal was for 110 aircraft in a mix of orders, options and rights."
    I recall 50 firm(At least 15 for JQ) +15 options +50 purchase rights fm those old press releases...

    Yes, QF Group during Geoff Dixon era was a lot more audacious about widebody fleet investment(Also bet on 380 x20) than under AJ's rein now...
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  • Himeno

    Himeno

    1 Nov, 2017 05:10 am

    The original order, in 2004, was for 115 787s with 65 firm orders and the rest a mix of options (20) and rights (30).


    In 2009, 15 firm orders were cancelled. In 2012 another 35 were cancelled, leaving 15 orders.


    11 of those remaining orders were taken as 787-8s for JQ. Another 1 was cancelled and the remaining 3 converted to the first QF 787-9s with 5 of the options firmed, leaving the current book of 8 orders, 15 options and 30 rights.


    Thus, of the original firm order, 11 have arrived for JQ, 1 arrived for QF, 51 have been cancelled and the last 2 arrive next month. Everything QF has now, without a new order (and likely different prices to the current book) are the original options and rights made in 2004.



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  • StudiodeKadent

    StudiodeKadent

    29 Oct, 2017 04:34 pm

    Okay so after they order the very long range 787s (for US and Europe-ex-PER routes) they'll probably order about 30 787-9s to replace the A330s.

    That seems reasonable to me. The outstanding options can be converted into NMAs (for Transcons and Asian services from Darwin, Perth, Adelaide), 777Xs, or NSAs/MAXes (to replace the 737s).
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  • FLX

    FLX1

    30 Oct, 2017 10:28 pm

    @StudiodeKadent:
    "...they'll probably order about 30 787-9s to replace the A330s."
    If QF order 30 more 789 per yr expectation, they won't be purely for 330 replacement given that current QF fleet only has 332/333 x28 and 332 cabin floor area is significantly smaller than 789. Some must be for purely int'l growth as AJ already said in the story:
    "...while the 787 as with the A330 are pretty powerful they are over-spec'd" for domestic flights, "so the economics do not work."

    "The outstanding options can be converted..."
    QF would be utilizing 787 purchase rights @ that point, not options. At the moment, QF's 787 contract is holding 15 options + 30 purchase rights.

    "..into NMAs (for Transcons and Asian services from Darwin, Perth, Adelaide), 777Xs, or NSAs/MAXes (to replace the 737s)."
    Agree, purchase rights are typically the easiest/least resistance fm vendor for conversion into another airplane type. I can see AJ may convert this final batch of 787 rights into most likely 1 or a combo of the followings:
    778(if 359ULR doesn't win), 797(if launched), Max10.
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  • Orus Picarous

    oruspicarous

    29 Oct, 2017 08:57 pm

    they seem guaranteed to make around 15 more orders (be it 7879 or 10) during their next earnings call,
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  • FLX

    FLX1

    30 Oct, 2017 10:39 pm

    @oruspicarous:
    "they seem guaranteed to make around 15 more orders..."
    My gut feeling tells me the same number mostly due to QF holding exactly 15 options for near term 787 production slots already scheduled by Boeing starting 2H2019.

    "...during their next earnings call."
    Unlikely the next 1 but more likely the 1 right after....when QF-specific 789s started generating Rev$ + op cost data for AJ's team to @ least do an initial investment evaluation.
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  • Christopher Campbell

    Chris2304

    31 Oct, 2017 12:52 pm

    so your saying they will order more at the FY2018 results day August next year?
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  • maabbot

    maabbot

    30 Oct, 2017 03:47 pm

    barely received their first one and now they have too many...this is where some vision comes in...think about how many US; Europe non stops could be in play...not to mention Asia...
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  • FLX

    FLX1

    30 Oct, 2017 10:51 pm

    @maabbot:
    To be fair, even during the golden days of QF's 744 fleet where they could be found nearly everywhere across QF int'l network, they never had more than 30 frames @ peak.

    787 x53(i.e. 8 firm + 45 options & rights) would be a huge fleet size for QF int'l in comparison.....and we hv not even counted 788 x11 @ JQ.
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  • Joe

    Joe

    30 Oct, 2017 11:12 pm

    great sardine cans for all their ultra long hauls....appealing-not.
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  • FLX

    FLX1

    31 Oct, 2017 08:02 pm

    @Joe:
    "great sardine cans for all their ultra long hauls....appealing-not."
    Easy solution to work around the unappealing aspect: Stop flying commercial and charter/own private jet instead..

    For anyone paying a tiny bit of attention to the recent global trend in airline industry fleet development, it should be obvious that the vast majority of ULH-capable types deployed by airlines in the future will be "great sardine cans" regardless of which manufacturer.
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  • patrickk

    patrickk

    31 Oct, 2017 07:41 am

    It will be around 45 all up. 25-30 to replace the A330s and 12-16 as long range versions.
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  • Lachlan Sturt

    LachlanSturt

    31 Oct, 2017 06:54 pm

    I hope that Qantas don't opt for the 78-10. With the -10 coming exclusively from South Carolina I wouldn't feel comfortable with the quality concerns that have been raised about that plant.
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  • FLX

    FLX1

    31 Oct, 2017 08:24 pm

    @LachlanSturt:
    " With the -10 coming exclusively from South Carolina I wouldn't feel comfortable with the quality concerns that have been raised about that plant."
    Never heard of such re the 787 line @ Boeing Charleston fm the final delivery perspective(i.e. build quality of the plane which customer actually got upon delivery.).

    What I did learnt was 787 line @ Charleston had serious productivity issues mostly due to the amount of rework required during the final assembly process to meet quality std for customer delivery, i.e. a customer did not even hv a chance to see(let alone inspect) the airframe ordered before all reworks were done. This caused fewer deliveries fm Charleston than planned originally by Boeing. However, even those issues @ Charleston were history as they were resolved about 1~1,5yrs ago....otherwise, Boeing wouldn't dare to plan 787 production rate to rise fm 12/mth(already a record for widebody production) to 14/mth starting 2019.
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  • Lachlan Sturt

    LachlanSturt

    31 Oct, 2017 08:31 pm

    Hi FLX1, thanks for some of the feedback in regards to the output and rework of some of the aircraft to accomodate customer concern.

    The quality concerns that I have raised are in regard to an Al Jazeera documentary called 'Broken Dreams' that dove into the quality concerns for aircraft out of Boeing's Charleston facility. This documentary can be accessed via YouTube, it's really interesting and I encourage anyone to view it.

    It highlights drug use whilst on shift by Boeing employees and also quotes some of them saying that they wouldn't even fly on any plane that left the facility.
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  • docjames

    docjames

    3 Nov, 2017 03:13 pm

    Would be a great idea to get similar great pricing on the 797 as they got on the 787s by being a launch order. Timing looks like it would almost work, and if delays occur on the 797 program (as did with 787) they will get good "incentives" and/or be able to take some 787-10s in the interim.


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  • P1

    P1

    3 Nov, 2017 03:37 pm

    Maybe Qantas thinks they are over spec'd for domestic flights, but their customers think they are under spec'd sardine cans for international flight.
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