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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