Qantas Says Dreamliner Delay Will Not Hurt Earnings

Australian carrier Qantas Airways said on Thursday that a delay in the delivery of its Boeing 787 Dreamliner planes won't affect earnings or strategy, but it will be seeking compensation.

Qantas passenger jets parked at their terminal at Sydney Airport.
Mark Baker
Qantas passenger jets parked at their terminal at Sydney Airport.

The carrier said the first Dreamliner plane will not be delivered to its Jetstar low-cost subsidiary before May 2009, and it was now looking at contingency plans including revised retirement dates for other aircraft and possible schedule adjustments.

Boeing Co said on Wednesday it would push back first test flight and deliveries of the Dreamliner by about three months, as it struggles with outsourced production of the new, carbon-fibre plane.

Boeing abandoned its target of delivering 109 of the 787s by the end of 2009 and said it was working with suppliers and customers to establish a new schedule.

The delay is the second major setback for the program in three months, after the plane maker announced a six-month delay in October. It also comes only a month after Boeing's commercial aircraft chief assured Wall Street that the plane was on track to meet its revised schedule.

Qantas said its contract with Boeing allowed for claims for damages in certain circumstances, and it will be discussing the issue with Boeing in the coming weeks.

Qantas has firm orders for 65 Dreamliners, with options for 20 more and purchase rights for a further 30, as the airline and its low-cost subsidiary Jetstar seek to expand on routes in the Asia-Pacific region.

The first 15 planes are scheduled to be used on Jetstar's fast-growing international operations.

Boeing's original, revolutionary plan was to outsource almost all the production of the plane to others, then simply connect the pieces itself.

The company said the new delay would not have a significant effect on 2008 results, but it would update its financial forecasts for this year when it reports quarterly earnings on Jan. 30. It plans to provide financial forecasts for 2009 when it reports first-quarter earnings at the end of April.