Qantas inches closer to Boeing 787 order

Qantas inches closer to Boeing 787 order

Read: Qantas to buy Boeing 787, first flights from 2017

Qantas is sounding increasingly confident on adding the Boeing 787 to its fleet on the back of the airline's return to profitablity, with initial discussions already underway which could see the first red-tailed Dreamliner flying within two years.

Having chalked up a $367 million dollar pre-tax profit over the July-December 2014 period, in a solid rebound from the previous year's $252 million loss, talk of making good on Qantas' oft-delayed Dreamliner order is back on the table.

Qantas has its dance card punched for 50 of Boeing's next-gen jets but the order has been contingent on a turnaround for the Flying Kangaroo's international arm, which would fly the Dreamliners on current routes and open up new destinations.

With Qantas International now back in the black – the overseas operation soared from a $262 million loss in the second half of 2013 to a pre-tax profit of $59 million in July-December 2014, representing a $321 million turnaround – that box has now been ticked.

Joyce seeks 'robust business case'

Now Qantas is moving on to the second element of the Dreamliner deal: making sure all the numbers add up.

There's no doubt that the fuel-efficient Boeing 787 will play its part in cutting Qantas' massive fuel bill, which is expected to come in at $4 billion this financial year – a figure which already includes an estimated $480 million savings from lower jet fuel prices.

Airlines already flying the Dreamliner are reporting fuel savings of around 20% compared to an equivalent jet, while Boeing is also spruiking a longer period between major maintenance checks.

New Dreamliner needs different deal for crew

Cutting a contract with would-be Boeing 787's crew, especially the flight deck officers, is another key element on the Qantas' pre-flight checklist for the Boeing 787.

“We are talking to our employees about getting that aircraft business case to work for us going forward," says Qantas Group CEO Alan Joyce, who described those discussions as a "good dialogue."

A strong card to play in discussions on conditions for crew working on the Boeing 787s will be the high appeal of being qualified on the Boeing 787, which is already flown by 29 airlines with almost 20 more still standing in the queue.

“We all want them in the fleet" says Joyce of the Boeing 787, which has been on Qantas’ roadmap since December 2005 when then-CEO Geoff Dixon inked a deal for as many as 115 of the jets to be delivered from 2008.

Red-tailed Boeing 787s by 2017?

Of course, the Dreamliner didn’t make its commercial debut until October 2011, while Qantas’ own commitment has been pared back and pushed back over the many years since, and now stands at first deliveries from 2017.

Qantas has also signalled that there's plenty of time to hammer out those agreements, with CFO Gareth Evans – who next week becomes CEO of Qantas International – saying that Qantas' spread on the 50 options and purchase rights plus its good relationship with Boeing gave the airline plenty of room to move.

“There is no pressure on us in terms of timing... there’s pretty much complete flexibility in terms of what we take and when."

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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.
 

59 comments

  • RK

    Ryan K

    27 Feb, 2015 12:56 pm

    Qantas needs the 787 pronto. If they want to further cut their fuel bill, they need to replace ageing four engined 747's (sadly), with these newer, fuel efficient twin engined aircraft. Let's get moving, Qantas!

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  • Fonga

    Fonga

    27 Feb, 2015 01:01 pm

    That's the question that nags me. Where does the 787-9 fit in the fleet? A replacement for the 747 on routes to Johburgh/Santiago/Vancouver? There are options for 50, so that says they have grander plans in the longer term. Be interesting to hear from Alan Joyce what the intention is for this super aircraft.

    They'll be here before 2017 for sure. Qantas is teasing.

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  • GaryOak

    GaryOak

    27 Feb, 2015 03:12 pm

    At least they can make johburgh/santiago once a week, rather than the 3-4 times weekly

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  • Himeno

    Himeno

    27 Feb, 2015 03:23 pm

    They could use 789s for flights to SFO, YVR, SEA, FRA, BER, CDG and extra flights into Asia.

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  • AJW

    AJW

    27 Feb, 2015 04:06 pm

    If you were going to put them onto new routes, I would say expand services out of secondary Australian ports first (Perth, Adelaide, Canberra) to the major Asian cities like Singapore, Hong Kong, Dubai etc rather than new (relativly obscure) overseas destinations.

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  • Agfox

    Agfox

    27 Feb, 2015 05:52 pm

    I'd like to see them flying direct from Melbourne to Kansai & Tokyo

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  • Peter Morrison

    pmorrison76

    27 Feb, 2015 06:35 pm

    I would be happy to see any type of QF plane out of Perth ! I still cannot figre out why Qantas dropped Perth from it's routes when Asia is one of our largest trading partners and an obviosu stop over point on the way to Europe for those of us who do not want to go via Dubai etc. SQ ans CX must be rubbing tghere hand together!

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  • AJW

    AJW

    27 Feb, 2015 06:57 pm

    Peter you basically answered your own question. Singapore (and Hong Kong) are hub posts, not for Qantas but for SQ and CX respectivly.

    Once Qantas rerouted Syd and Mel/LHR via DXB they lost any passengers hubbing through SIN from places like Perth. As a destination only there are not enough passengers to fill a daily A330 (hence rumours about a daily 737-800) flight.

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  • Peter Morrison

    pmorrison76

    27 Feb, 2015 07:53 pm

    Now I understand , so basically when the deal was done with Emirates Qantas were ok about loosing pax out of PER to SIng and Hong Kong to SQ and CX ( collateral damage) The only thing I guess they could not calculate is the damage they have done to loyal ADL and PER customers who were that dilsalusioned that they have moved all their custom including domestic flights to competitors. I would have thought  2 or 3 times a week with an A330 would have been viable but I guess the logistics might have put them off . Seems weird to me that Qantas have invested lots of dollars into lounges and extra flights to Sing and HK out of  MEL and SYD but cannot make PER flights work for them? 

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  • AJW

    AJW

    27 Feb, 2015 11:17 pm

     Fonga, do remember that when Qantas ordered these the plan was:

     

     788's to Jetstar.

    When 789 came online (which when ordered was meant to be 3-4 years later), the 789's would go to Jetstar, with the 788's in the JQ config (read what would have been Qantas domestic) to then come to Qantas to replace the 767's DOMESTICALY.

    Of course lots of water under the bridge and plans changed etc, but just don't assume beacuse they have so many options, that the plan they originally had still stands. Bottom line is who knows what the plan is, but for sure it isn't the plan when first ordered.

     

     

     

     

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  • AJW

    AJW

    27 Feb, 2015 03:06 pm

    All well and good, except the 787 is not a 747 replacement. The aircraft may have equal range, but seating wise it is more the size of a 767-300 (788) or a 767-400 (789) than a 747. Whilst the fuel savings may be immense, to carry the same number of passengers would require more aircraft, more crew, more landing fees etc al of which goes someway to offset any fuel savings.

    Now Qantas of course does need a 747 replacement, the nearest thing to that is actually the A350-1000 (around 80-100 seats short) or 777-300ER or 777-8X/9X.

    The A350-1000 is available now, so would make sense and fit in with the A330 and A380 from a crew perspective. As for the 777-300ER yeah it would work, but as Qantas doesn't have any 777's now, you would think it would be better to wait and order the 777-8X or 777-9X. Though of course the latter would run the risk of delays similar to what they have experianced with the 7late7 and of course the A3latey.

    But getting back the the 789, considering Qantas are upgrading the cabins on the A330's, we can assume they are not going anywhere soon (now before someone says they upgraded the 767's only to get rid of them, this was a minor cosmetic change and was only intended as a stop gap), so anyway begs the question where would Qantas use 789's. I mean to say even under their original plan, Jetstar were to eventually get the 789's and the 788's were to be used by Qantas as 767 replacements domestically.

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  • Ryan Stephen

    RaptorNation158

    28 Feb, 2015 09:15 am

    I believe you can just double the route offering and that should be a bit above the 747 but the overall cost and slots will be more than the 747.

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  • AJW

    AJW

    28 Feb, 2015 11:57 am

    Exactly. Lots of fixed costs per aircraft.

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  • Jedinak K

    Jedinak K

    28 Feb, 2015 02:23 pm

    I thought the A380 was the replacements for the B747?

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  • AJW

    AJW

    1 Mar, 2015 11:49 am

     Nope, they never ordered enough for that to be the case. They did however order the A380 to replace SOME 747's. 

    But look at the fleet now, there are still around 12 (maybe a few less depending upon recent retirements) 747's in the fleet with no clear replacement annouced.

    On the basis of 12, they have 3 that never received cabin upgrades and they are over 20 years old, built in 1993 (-OEB) 1990 (OJI) and 1991 (OJM). Whilst another 3 non ER's are newer, being 1999/2000 builds, they will need to be replaced in the next 5-7 years with the 6 ER's not far behind being 2002/2003 builds.

     

     

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  • Craig Dennington

    cdinoz

    6 Mar, 2015 11:39 am

    I have said for some time that the A350-1000 seemed to be a better fit in routes to replace the 747 than the 787. Higher ETOPS out of the box would be of benefit to QF here? 

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  • AJW

    AJW

    6 Mar, 2015 01:47 pm

    Agree, though would think the higher capacity (closer to 747 size) is more important than an out of the box ETOPS rating. Not many of Qantas flights need a long ETOPS rating. Even flights to the US work on 180 minutes.

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  • Jedinak K

    Jedinak K

    7 Mar, 2015 01:03 am

    Plus the A350 shares a cockpit commonality with A380 cockpit so it saves costs for training management.

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  • Ryan Stephen

    RaptorNation158

    8 Mar, 2015 07:44 pm

    I am pretty sure most A380 pilots have flown the 747, I don't know if there is even a need for training, other than the need to get used to the other new aircraft systems.

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  • AJW

    AJW

    8 Mar, 2015 08:03 pm

    A330 to A350 is a two week training course and afterwards pilots can hold certifications to fly both aircraft. 

    747 to and Airbus aircraft is a much longer course (24 days) plus they can then only be certified in one type. Eg not possible to go from 747 to A330/A350 and one day fly the 747 then an A350 the next. But if you have dual A330/A350 certification you can fly one one day and the other the next.

    On paper it seems like a good being it to have but in reality maybe not do much. 

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  • Himeno

    Himeno

    27 Feb, 2015 03:18 pm

    QF (and VA) can not use a twin jet for Australia-Southern Africa/South America flights unless CASA allows better then ETOPS 180.

    The requirement that VA fly a ETOPS 180 path caused their MEL-JNB flights to be up to 3 hours longer then the QF and SA AU-JNB flights.

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  • AJW

    AJW

    27 Feb, 2015 03:46 pm

    It's actually not an ETOP's issue, it what CASA calls EDTO and applies equally to 4 engined aircraft. Though of  course the end result does look like an ETOP's restriction when it comes to twins. But slight difference. Also only applies to Australian operators from what I understand.

    Interestingly though CASA have just (Jan 2015) amended the rules, but not sure if that would make it more viable for twin operations to JNB and the like.

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  • GregXL

    GregXL

    27 Feb, 2015 06:17 pm

    I understand that LAN will be operating 789s on Sydney - Santiago later this year.  I hadn't appreciated that QF could be prevented from doing the same.

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  • AJW

    AJW

    27 Feb, 2015 07:01 pm

    Yep, and it was also the reason why Virgin Australia dropped JNB. These restrictions added extra time to the routing which made it unviable.

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  • CBR boy

    CBR boy

    28 Feb, 2015 01:51 am

    CASA's Civil Aviation Advisory Publication 82-1(1), released in January, basically opens the way for the approval of aircraft & engine combinations, including twin-turbine aircraft, to undertake Extended Diversion Time Operations (EDTO) with a maximum diversion time above 240 minutes with one engine inoperative. The document alos provides the basis for CASA approval of polar area operations. So the 787 could be a candidate for Qantas flights to South Africa and South America.

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  • Craig Dennington

    cdinoz

    6 Mar, 2015 11:47 am

    Himeno - they can if they took the A350 instead. Has much better ETOPS than the 787.

    The A359 has Euro ratings for ETOPS 370...smashing any need for re-routing restricted by 180 ratings.

    The 787 has been cleared for ETOPS 330 I think by the FAA only.

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  • AJW

    AJW

    6 Mar, 2015 01:26 pm

    cdinoz ETOPS certification is a maximum certification for that aircraft. It is still up to individual regulators to certifiy airlines for ETOPS operations. CASA does this through their EDTO rules. These rules are what has made it hard/not cost effective for Virgin Australia to fly the 777 to JNB.

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  • Peter  Rutten

    prutten82

    27 Feb, 2015 01:06 pm

    Just place the damn order AJ, Boeing's getting impatient by the day.

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  • jrfsp

    jrfsp

    27 Feb, 2015 01:08 pm

    If they go for 9 abreat, wont be much product difference between JQ.

    Would be interesting if VA went for A350s or A330NEOS for its A330 replacement, could make me switch allegiance

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  • Dale

    hakkinen5

    27 Feb, 2015 01:49 pm

    I've read that QF have incredible pricing on these jets from being a launch or soon after customer. But that this pricing will expire soon. Is this correct? So how much time do they have to place an order at the discounted price?

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  • drpurpleturtle

    drpurpleturtle

    28 Feb, 2015 01:10 pm

    You should know that only two airlines have chosen eight abreast seating, those two being ANA and JAL.

    No other airline to date has chosen the eight abreast seating arrangement with everyone else opting for the nine abreast arrangement, these include major airlines such as: QR,EY,BA,UA,NZ,AA,VS,AC,CZ,BI

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  • Jedinak K

    Jedinak K

    28 Feb, 2015 02:31 pm

    I read somewhere that QF planned 275 seats for their 789 seating,  so by that plan it's 9 abreast

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  • AJW

    AJW

    28 Feb, 2015 06:48 pm

    Qantas never had plans for the 789. The only plan ever advertised was the 788's were to go to JQ, then when the 789 became available the new 789's would go to JQ and Qantas domestic would get the 788's as the 767 repacement. Qantas never annouced any plans to operate the 789.

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  • crosscourt

    crosscourt

    27 Feb, 2015 02:56 pm

    Please put it on Kangaroo Route with Singapore as an option to Dubai.

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  • Ryan Stephen

    RaptorNation158

    28 Feb, 2015 09:16 am

    And Hong Kong too...

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  • watson374

    watson374

    1 Mar, 2015 01:36 am

    What, operating SYD-SIN-DXB? :P

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  • crosscourt

    crosscourt

    1 Mar, 2015 12:37 pm

    no no SYD/SIN/LHR

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  • crosscourt

    crosscourt

    1 Mar, 2015 12:37 pm

    no no SYD/SIN/LHR

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  • daschok

    daschok

    27 Feb, 2015 03:13 pm

    IN my opinion the QANTAS Livery does not work on the 787, they may have to change the livery to make it work on the 787. The Kangaroo is fine, just the QANTAS and the Spirit ...... llok a little iffy. 

    Don't get me wrong though. The 787 will do fine in the QF fleet. I would put it on the HNL and some of the further away Asian routes and maybe start SFO again. 

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  • AJW

    AJW

    27 Feb, 2015 07:20 pm

    Gets back to the fact that the 787 is not actually a very large aircraft. The two versions out now are basically the same size as the 767-300 and 767-400. In fact except for the nose and wing they are hard to tell appart.

    The other day I was in BKK I saw a Transero 767 and a Thai and Royal Jordanian 787 all lined up next to each other and from the back it was a struggle. Only looking at the wing and engine gave it away.

    Of course the 787 is no 767 by a long shot, but size wise pretty close, meaning of course the livery may well look a bit more compressed than on something a bit bigger.

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  • crosscourt

    crosscourt

    28 Feb, 2015 09:58 am

    and the exhaust, 787 that has metal bit :)

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  • Ryan Stephen

    RaptorNation158

    1 Mar, 2015 08:00 pm

    Hopefully they learnt something from their competitor across the ditch, you could maybe have an all red plane with some nice Qantas font and a Kangaroo in white, with an Aussie touch of course. 

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  • Michael Gibbons

    rowwdy

    27 Feb, 2015 03:34 pm

    I'd love to see them on Dubai routes for Bris/Adelaide/Perth. Would be a great way to regain some of the ground lost to SQ and CX.

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  • Ryan Stephen

    RaptorNation158

    28 Feb, 2015 09:22 am

    I would like them to return to SFO, launch new Kangaroo routes via Singapore and Hong Kong. If there's demand, then maybe a 787 from Melbourne to Dallas/SFO/IAH. Flights from Perth to Hong Kong (to conect to new London flights) and also bring back Adelaide to Singapore (to connect with LHR), maybe also direct flights from Sydney to Beijing and Mumbai. And to top it off a return to FRA would also be greatly appreaciated along with opening more routes to Europe via Dubai if EK asks for help.

    Please do not dislike if you disagree, I may have said some foolish things but that's what I think Qantas should do. I have not taken any agreements or anything like that into account. Please feel free to debate my opinion.

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  • Ryan Stephen

    RaptorNation158

    28 Feb, 2015 09:24 am

    Oh and a new Sydney-Seoul service. Maybe also for Melbourne but I won't expect it.

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  • Ryan Stephen

    RaptorNation158

    28 Feb, 2015 09:26 am

    And Qantas had plans of going to Delhi Mumbai and Seoul a while ago so I think that's what they will be doing.

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  • Jedinak K

    Jedinak K

    28 Feb, 2015 11:48 am

    Boeing 787 isn't a magic aeroplane that will fly you everywhere.  It depends on factors like market demand/economics/possible load factors and a whole range  of others.  To get back to flying to UK via Singapore,  that could only occur once the current QF/Emirates partnership expires.  And logically speaking I don't see an economic advantage for QF to fly via SIN again since its partnership with Emirates allows passengers a variety of destinations to Europe and North Africa in one stop. 

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  • AJW

    AJW

    28 Feb, 2015 12:02 pm

    Too right, South East Asia, for Australians is better suited as a hub into Asia. Gets back to why Qantas was looking at setting up their own full servers Asian airline. Though I am still at a loss to understand why, having sponsored MH into OneWorld Qantas hasn't started flying to KL and feed into MH Asian network. Of course the events of the last year have rightly or wrongly put the MH brand in the wrong light, but these decisions were made well before.

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  • Mark

    Mightyreds

    28 Feb, 2015 09:55 am

    Rishi I agree. Flights to Europe via Singapore would be the best news from Qantas. It has always felt like home away from home and the natural stopover city on flights back to the UK/Europe. It's not been the same since they pulled out!!

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  • Ryan Stephen

    RaptorNation158

    28 Feb, 2015 06:09 pm

    I certainly agree Mark :)

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  • crosscourt

    crosscourt

    1 Mar, 2015 12:39 pm

    which is what i suggested initially

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  • crosscourt

    crosscourt

    1 Mar, 2015 12:39 pm

    which is what i suggested initially

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  • mintaro

    mintaro

    28 Feb, 2015 03:16 pm

    If I was crossing seas close to Antartica en route to Johannesburg and Santiago, I would want the security of four engines, not two, thank you! The 747 is safe and reliable-an Airbus A340-500 would make much more sense on those routes.

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  • airplane_bruh

    airplane_bruh

    28 Feb, 2015 03:35 pm

    wish they would buy 747-8s and add syd-kix

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  • Ryan Stephen

    RaptorNation158

    28 Feb, 2015 06:12 pm

    A340 is a fuel-hog, but yes it's the next thing best to putting a 747 or A380 on these routes. But if Lan can do this stuff why not Qantas, I think it should be fairer but oh well.

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  • VC10

    VC10

    28 Feb, 2015 09:33 pm

    Have we all forgotten the "teething problems" that marred this plane's entrance into service ?

    Are we all satisfied with Boeing's solution to a problem even they admit they don't understand - thermal runaway ?

    Encasing the battery in a robust metal shield and building vents that allow egress of smoke from the plane says to me, that Boeing fully expect another fire.

    If the 787 was European, it would have tremendous problems attaing FAA certification.

    If it was Chinese or Russian , well you all know what would happen.

    I'm delighted to see QF back in black, and no doubt most who read my comments will consider me a crank.

    Please reply WHEN one is lost.

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  • gippsflyer

    gippsflyer

    1 Mar, 2015 05:42 am

    I must admit I'm not so much interested in what new aircraft will enter the Qantas fleet as much as what seating config they'll put in any new birds. I certainly hope all future J cabins will offer all direct aisle access. 

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  • Dave Thomas

    deethom

    2 Mar, 2015 07:54 am

    Rishi, red may be a nice colour, but as VA found out it tends to fade, and look old and worn, in comparison to white. So more time out in the paint shed, plus added costs.

    Our cousins across the ditch only use the darker colours for special occasions, ie., the All Blacks, or movie theme. Bit like QF's 737 retro paint scheme.

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  • Craig Dennington

    cdinoz

    6 Mar, 2015 11:34 am

    Just noting David's comment here: "the high appeal of being qualified on the Boeing 787"...
    Whilst I know that pilots seem to be more fickle about Airbus v Boeing than us frequent flyers and plane nerds, I've spoken to a number of the JQ ex-A330 bus drivers who are now qualified on the 787, who are less impressed with their new workplace. "Old and out of date flying kit" seemed to be the general opinion. 

    I also have a Captain friend at VS in the UK who refused to re-train on the 787 when she learned the 346's were to be retired. She is sticking to the Airbus combo of 330/340 as long as Virgin keep those birds active!

    Interested in hearing if this is merely an AvB thing, like Holden v Ford? !!

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