Boeing Co. lost an order for 35 Dreamliners with a list price of $8.5 billion in the biggest 787 cancellation yet as Qantas Airways Ltd. scrapped a contract after delivery delays and losses on international routes.
Qantas’s pullback on the 787-9 reduced Chicago-based Boeing’s backlog for the larger derivative of the composite- plastic plane by about 10 percent. It also underscores a travel slowdown that has caused carriers including Cathay Pacific Airways Ltd. and Singapore Airlines Ltd. to cut growth plans.
“It’s going to bother people more because of what it says about growth in air travel than because of anything it says about the 787,” said Howard Rubel, an analyst with Jefferies & Co. in New York. “You could have seen for some time that there have been some financial challenges in the market.”
Europe’s economic weakness has blunted air-travel strength in other regions, and there are signs that demand for premium seats on international flights, which fetch the highest fares, may diminish further in coming months, according to a report last week from the International Air Transport Association.
Qantas will get $433 million from Boeing, including more than $300 million compensation for 787 delays and a refund of deposits for the canceled order, Chief Financial Official Gareth Evans said today at a press briefing in Sydney.
The airline’s budget arm Jetstar will still receive 15 of the smaller 787-8s starting next year. A Boeing spokesman, Marc Birtel, declined to comment on the finances.
SOURCE BLOOMBERG
You must be logged in to post a comment.