- Qantas scraps $8.5B order for Boeing 787 Dreamliners for its troubled international arm
- The group reported its first loss since it was privatized almost two decades ago
Qantas has scrapped an $8.5B order for Boeing 787 Dreamliners for its troubled international arm after the group reported its first loss since it was privatized almost two decades ago.
The Australian flag carrier posted a loss before tax of A$349m for the year to June, down from a profit of $323m a year earlier, under the pressure of costs from last year's industrial dispute, impairment costs and high fuel prices.
Citing the uncertain global outlook and "lower growth" requirements, Qantas said on Thursday that it had it canceled firm commitments for 35 state-of-the-art B787-9 aircraft and pushed back the delivery date for a further 50 Dreamliners, which have suffered repeated production setbacks, to 2016 from 2014.
"The B787 is an excellent aircraft and remains an important part of our future," said Alan Joyce, Qantas chief executive. "However, circumstances have changed significantly since our order several years ago. It is vital that we allocate capital carefully across the group."
In early trading in Sydney shares in Qantas rose 1.7% to A$1.90.
The decision to cancel the order is expected to see Qantas receive A$433m in refunds and compensation from Boeing.
Qantas said it was unable to provide earnings guidance for the new financial year because of the "high degree of volatility and uncertainty in global economic conditions," fuel prices and exchange rates.