Qantas Conducts Biggest-ever Order Cancellation

Qantas Airways announced to cancel its order of 35 Boeing 787 Dreamliners, which had been reckoned to be placed prematurely owing to the economic uncertainty currently prevailing in the airline industry.The cancellation will have a massive impact on Boeing’s Dreamliner project, which has already absorbed $14 billion to initiate.

The announcement was made following the declaration of the airline ending the current year in a net financial loss of $257 million. The airline has pointed out primordial concerns which led to the decision, which included price hikes for fuel, disputes of its employee base and intense competition it had to face in its domestic routes. The face value of savings from the order cancellation alone amount to $8.5 billion, an estimate which is bound to decrease after discounts are brought under focus.

Qantas sticks to an optimistic approach over the ordeal with plans to buy 15 aircraft of a comparatively cheaper variant model of the 787, the 787-8. This order will felicitate regional flights internal to Asia under Qantas’s subsidiary, Jetstar.

Boeing has had delays in fulfilling orders for the Dreamliner project so far, with the longest lag occurring with Nippon Airways. The Japanese airline received their order 3 years after the scheduled time. China Eastern cancelled their order with Boeing for 24 Dreamliners last October, citing the very same reason. The project is hampered with compensations paid to carriers for order delays as well as cost overruns.