Jetstar’s expansion on the backburner
A Report by Steve Creedy in The Australian says that Jetstar’s ambitious expansion faces a further delay of up to three months because of a failure by Boeing to fix production problems with its 787 Dreamliner.
The Seattle-based plane-maker is expected to announce as early as today that the first flight by the fuel-efficient, carbon-composite jet will be postponed until June.
Aviation sources expect the delay to the crucial flight tests, which had been expected around March, to push out deliveries by a similar timeframe.
This would see the first deliveries to the Qantas Group now nine months behind Boeing’s original schedule and not happening until mid-next year.
With 65 firm orders so far, Qantas is the world’s biggest airline customer for the new plane, and the 787 is a major component in the carrier’s fleet renewal strategy.
Parts shortages and problems with a complex web of global suppliers forced the US aerospace giant to announce in October that it would delay the delivery of the first plane to Japanese carrier All Nippon Airways from May this year to November-December.
That delay pushed back the delivery of the first Qantas Group plane from August to February next year.
US media reports have now speculated that Boeing will be unable to meet its goal of delivering 109 planes by the end of next year, although it is unclear how this delay would affect individual airlines.
The first 15 Qantas planes are slated for low-cost offshoot Jetstar, which plans to use them for an ambitious international expansion that will see it offer one-stop flights to Europe.
The airline is certain to demand financial compensation from Boeing to help offset any additional costs that are caused by the delay.
Because it is initially using the new aircraft for growth rather than to replace old planes, the delay will not affect the existing international operations.
However, the carrier will have to again reschedule pilot training and recruitment, and it is not clear how the delay will affect the dramatic marketing advantage Jetstar derives from being only the second airline to fly the 787.
The 787 is about 20per cent more fuel efficient than existing equivalent planes, and it will offer a new standard of comfort for passengers.
Some analysts have suggested Qantas may welcome the delay, given recent predictions that airline earnings growth is expected to drop from the end of this calendar year.
Those predictions and a general market slump saw the Qantas share price fall more than 5per cent yesterday to close at $4.65, its lowest level since 2006 and almost $1 below the original $5.60 a share offer during last year’s failed private equity bid.
This followed a 4.5 per cent fall on Monday after a sell recommendation by analysts at Merrill Lynch.
A Report by The Mole from The Australian
John Alwyn-Jones
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