Cites Fuel Costs, Labor Unrest, Rising Competition

Qantas has scrapped plans to buy 35 Boeing 787-9 Dreamliners after posting its first annual loss in over 17 years. The order was worth $8.5 billion on Boeing's order book. Qantas said that rising fuel costs, ongoing labor disputes, and more international competition led to the decision.

Qantas CEO Alan Joyce said in a statement that "lower growth requirements in the uncertain global context" was the reason for the move. Qantas reportedly lost $258 million for the fiscal year that ended June 30th, according to Bloomberg Business Week.

Cancelling the Dreamliner order actually pushed Qantas' stock higher on the Sydney stock exchange. Cancelling the airplanes eased concerns about the company's bottom line.

Not that it means there will be no Dreamliners flying in Australia. Jetstar, a Qantas subsidiary, plans to take delivery of the first of 15 787-8 airliners it has on order next year. Boeing reportedly owes the airline more than $300 million in penalties because of delivery delays. Boeing will also have to refund deposits of under $100 million for the 787-9 orders that were cancelled.

The Daily Herald of Everett, WA, reports that Boeing said in a statement that Qantas remains a "long-standing and valued customer" and that "We stand ready to serve them with 787-9s to meet their long-haul fleet needs into the future." The airline has retained purchase rights to 50 787-9s, according to Boeing.

FMI: www.qantas.com, www.boeing.com