Merged: QF 777s and other rumours
jet.jackson
If it’s new B777’s they want, sorry no slots available until 2014. Boeing have made it very clear that they “WILL NOT” be ramping up production on the Tripler line. There may be some on the second hand market but they will be few and far between as well because of high fuel costs.
If it’s new B777’s they want, sorry no slots available until 2014. Boeing have made it very clear that they “WILL NOT” be ramping up production on the Tripler line. There may be some on the second hand market but they will be few and far between as well because of high fuel costs.
404 Titan, don't dismiss jet.jackson's post so easily. The board arrived in NY over the weekend and are meeting all this week. My source says that the biggest decision that they have to make is the B777 offer which is tied in as part of the compensation package that has being negotiated with Boeing for the delay in delivery of the B787's. I understand that there are some B777-300ER's on the production line that have recently been deferred/cancelled by other operators. This would allow early delivery as Qantas is desperate for more capacity (my source indicated that they were most likely going to mainline - not Jetstar).
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Media Report...Just 4 Titan 404
RISING fuel costs and tight credit conditions pose a new dilemma for Qantas directors, who are in New York for a crucial board meeting.
The directors are now in New York for what the airline says is the most important board meeting in years.
Top of the agenda is the fuel crisis, which has caused the carrier's shares to tumble over the past year, halving the value of the business.
Qantas is now worth a little more than $20 billion and has committed to a total fleet replacement program worth about the same amount.
A year ago, before fuel soared to more than $US100 a barrel, the airline's stock peaked at $5.87, valuing it at just more than $40 billion.
Yesterday the stock closed at $3.06, down another 6 or 1.92 per cent.
The falling share price will put Qantas under even more pressure by affecting credit costs at a time when the airline is about to seek finance for a new fleet of fuel-efficient Airbus super jumbos and Boeing Dreamliners.
Ratings agency Moody's yesterday cranked the pressure further by adivising that it had Qantas under review for a possible credit downgrade.
The agency said the airline's third lowest investment grade credit rating of Baa1 could be lowered if it was unable to offset surging jet fuel prices.
"Cost side pressure, and most critically the cost of fuel, have raised the level of financial risk, and Qantas is in the process of implementing rapid cost and revenue-side initiatives to protect its profit margins," said Moody's vice-president Ian Lewis, the agency's lead analyst on Qantas.
He added that Qantas faced significant challenges because the airline was already "weakly positioned within its ratings".
These issues will no doubt influence the decision Qantas directors have to make about yet another new aircraft.
Apart from the A380 and Boeing Dreamliner, the airline has to find a replacement for its 13 ageing 747 Boeing jumbos.
The only option available at present is the Boeing 777-300 ER, (extended range) twin jet, which is reputed to be the most fuel-efficient aircraft flying.
It is understood that one of the reasons for holding this week's board meeting in New York was to hold talks with Boeing president James McNerny who is keen to sell the aircraft to Qantas, a move which could see the airline trade some of the options it holds for Dreamliners in exchange for the 350-seat 777s.
Qantas chief executive Geoff Dixon has told both Boeing and Airbus the aircraft to be chosen as the 747 replacement has to carry 350 passengers and fly the Pacific non-stop.
The 777 has all of these atributes
The directors are now in New York for what the airline says is the most important board meeting in years.
Top of the agenda is the fuel crisis, which has caused the carrier's shares to tumble over the past year, halving the value of the business.
Qantas is now worth a little more than $20 billion and has committed to a total fleet replacement program worth about the same amount.
A year ago, before fuel soared to more than $US100 a barrel, the airline's stock peaked at $5.87, valuing it at just more than $40 billion.
Yesterday the stock closed at $3.06, down another 6 or 1.92 per cent.
The falling share price will put Qantas under even more pressure by affecting credit costs at a time when the airline is about to seek finance for a new fleet of fuel-efficient Airbus super jumbos and Boeing Dreamliners.
Ratings agency Moody's yesterday cranked the pressure further by adivising that it had Qantas under review for a possible credit downgrade.
The agency said the airline's third lowest investment grade credit rating of Baa1 could be lowered if it was unable to offset surging jet fuel prices.
"Cost side pressure, and most critically the cost of fuel, have raised the level of financial risk, and Qantas is in the process of implementing rapid cost and revenue-side initiatives to protect its profit margins," said Moody's vice-president Ian Lewis, the agency's lead analyst on Qantas.
He added that Qantas faced significant challenges because the airline was already "weakly positioned within its ratings".
These issues will no doubt influence the decision Qantas directors have to make about yet another new aircraft.
Apart from the A380 and Boeing Dreamliner, the airline has to find a replacement for its 13 ageing 747 Boeing jumbos.
The only option available at present is the Boeing 777-300 ER, (extended range) twin jet, which is reputed to be the most fuel-efficient aircraft flying.
It is understood that one of the reasons for holding this week's board meeting in New York was to hold talks with Boeing president James McNerny who is keen to sell the aircraft to Qantas, a move which could see the airline trade some of the options it holds for Dreamliners in exchange for the 350-seat 777s.
Qantas chief executive Geoff Dixon has told both Boeing and Airbus the aircraft to be chosen as the 747 replacement has to carry 350 passengers and fly the Pacific non-stop.
The 777 has all of these atributes
Media Report...Just 4 argus.moon
Boeing will continue to rely on 'disciplined approach' to 777 production rates
Boeing is coming under, and resisting, intense pressure from airlines to increase production of the 777-300ER, with the first availability for new orders now quoted as 2014.
With more and more carriers parking 747s, pressure is mounting for delivery of 777s, which burn 20% less fuel per passenger.
In November, VP-Sales-Middle East and Africa Martin Bentrott said production was sold out through 2012 with only a few slots available. In just six months, all of the remaining 2012 and all 2013 slots have been snapped up. Boeing has announced sales of 36 777s this year with a significant number of firm commitments yet to be signed.
The company said it is "experiencing unprecedented demand for its commercial airliners and is constantly reviewing the complex process of matching demand with the physical and economic constraints of the production system." Currently it is producing 777s at a rate of 6.6 per month based on 33 deliveries through May 30.
While pleased with that demand, the manufacturer added, "In the past, Boeing, its employees, suppliers and its customers suffered the effects of a breakdown of the production process resulting from efforts to increase production too rapidly. Boeing is determined to produce efficiently through the market cycles going forward. This will allow us to maintain relatively stable employment levels, maintain high levels of quality and keep the residual values of airplanes high to protect our customers' investment in our products."
It continued, "This effort may result in us not being able to meet all customers' requirements in the timeframe they prefer. Ultimately, though, Boeing believes that a disciplined approach to managing production rates is in the best interests of all parties involved."
The company did not respond to a question about the effect of the 787 delay - up to 24 months in some cases - on demand for 777s as replacements for shortfalls in capacity.
Airlines also are waiting for Boeing's response to the A350-1000, which targets the lower end of the 777-300ER market. It stated that it has been waiting for Airbus to define the exact performance of the A350-1000. Last week Airbus briefed customers in Madrid and advised that the maximum takeoff weight of the -1000 is to climb by 2 tons, which may affect some range performance targets.
Wires
Boeing is coming under, and resisting, intense pressure from airlines to increase production of the 777-300ER, with the first availability for new orders now quoted as 2014.
With more and more carriers parking 747s, pressure is mounting for delivery of 777s, which burn 20% less fuel per passenger.
In November, VP-Sales-Middle East and Africa Martin Bentrott said production was sold out through 2012 with only a few slots available. In just six months, all of the remaining 2012 and all 2013 slots have been snapped up. Boeing has announced sales of 36 777s this year with a significant number of firm commitments yet to be signed.
The company said it is "experiencing unprecedented demand for its commercial airliners and is constantly reviewing the complex process of matching demand with the physical and economic constraints of the production system." Currently it is producing 777s at a rate of 6.6 per month based on 33 deliveries through May 30.
While pleased with that demand, the manufacturer added, "In the past, Boeing, its employees, suppliers and its customers suffered the effects of a breakdown of the production process resulting from efforts to increase production too rapidly. Boeing is determined to produce efficiently through the market cycles going forward. This will allow us to maintain relatively stable employment levels, maintain high levels of quality and keep the residual values of airplanes high to protect our customers' investment in our products."
It continued, "This effort may result in us not being able to meet all customers' requirements in the timeframe they prefer. Ultimately, though, Boeing believes that a disciplined approach to managing production rates is in the best interests of all parties involved."
The company did not respond to a question about the effect of the 787 delay - up to 24 months in some cases - on demand for 777s as replacements for shortfalls in capacity.
Airlines also are waiting for Boeing's response to the A350-1000, which targets the lower end of the 777-300ER market. It stated that it has been waiting for Airbus to define the exact performance of the A350-1000. Last week Airbus briefed customers in Madrid and advised that the maximum takeoff weight of the -1000 is to climb by 2 tons, which may affect some range performance targets.
Wires
The B777 and the B787 aren't assembled on the same line so QF trading some B787 slots won't free up slots on the B777 production line. They are the facts. Sorry to spoil your day and a good rumour.
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Media Report vs Media Report
One doesn't necessarily refute the other.
Aircraft on the line have had their orders cancelled.
Qantas may pick up those aircraft that are no longer required by another carrier.
Part of a compensation package for late delivery
Aircraft on the line have had their orders cancelled.
Qantas may pick up those aircraft that are no longer required by another carrier.
Part of a compensation package for late delivery
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Boeing's website suggests about 10 777s have been cancelled in recent years. Combine this with a few deferrals and you could squeeze in a few extra.
One suggests that with the recent fuel price rises, some carriers would be happy to defer (not cancel) any deliveries which are purely for capacity increase (as opposed to replacing another, more fuel-guzzling type) until the dust settles. Similarly, these boards were very recently awash with stories of some carriers parking aircraft due lack of crews - if that's still the case, then they would be deferral candidates until that situation gets sorted out. A carrier with 15/20/25/30 777s already in service might be happy to put 5 or so they have on order, back from 2012/3 delivery to 2014/5. And manufacturers would bend over backwards to 'defer' rather than 'cancel' as canx'es look bad for their stats; a deferral (or slot trade) allows them to then put a positive spin on it when a 'new' order is forthcoming (especially from a new operator of the type).
Don't forget also that some slots are held by lessors 'on spec' - that is, ordered by the lessor before they have placed the aircraft with a carrier. Hence a three-way could be done between Boeing, the lessor and the carrier (eg. lessor places frame with carrier and Boeing covers at least part of the lease cost as part of the compensation package).
And it would not take much to ramp-up from 6.5 per month to 8 or so. Lack of orders on the 767 line (whilst using different tooling) would at least free up some labour and floor space for a slight increase in 777 production. 404 Titan - I seem to recall from my visit to the Everett floor that 767 and 777 production is on the same line (but that was 5 years ago).
I suspect the 'discipline' that Boeing is talking about, is resisting ramping up from 6.5 to 10 or so. Recall 10-15 years ago when 747-400 production was ramped up to double figures, there were all sorts of quality control issues; then industrial problems when Boeing sought to lay off workers as things slowed down. Then they got really scarred by a month-long strike a few years ago. I suspect they are keen to avoid that sort of cost (both monetarily and to reputation) again and so would rather see a few orders go east rather than make promises they cannot ultimately deliver upon.
One suggests that with the recent fuel price rises, some carriers would be happy to defer (not cancel) any deliveries which are purely for capacity increase (as opposed to replacing another, more fuel-guzzling type) until the dust settles. Similarly, these boards were very recently awash with stories of some carriers parking aircraft due lack of crews - if that's still the case, then they would be deferral candidates until that situation gets sorted out. A carrier with 15/20/25/30 777s already in service might be happy to put 5 or so they have on order, back from 2012/3 delivery to 2014/5. And manufacturers would bend over backwards to 'defer' rather than 'cancel' as canx'es look bad for their stats; a deferral (or slot trade) allows them to then put a positive spin on it when a 'new' order is forthcoming (especially from a new operator of the type).
Don't forget also that some slots are held by lessors 'on spec' - that is, ordered by the lessor before they have placed the aircraft with a carrier. Hence a three-way could be done between Boeing, the lessor and the carrier (eg. lessor places frame with carrier and Boeing covers at least part of the lease cost as part of the compensation package).
And it would not take much to ramp-up from 6.5 per month to 8 or so. Lack of orders on the 767 line (whilst using different tooling) would at least free up some labour and floor space for a slight increase in 777 production. 404 Titan - I seem to recall from my visit to the Everett floor that 767 and 777 production is on the same line (but that was 5 years ago).
I suspect the 'discipline' that Boeing is talking about, is resisting ramping up from 6.5 to 10 or so. Recall 10-15 years ago when 747-400 production was ramped up to double figures, there were all sorts of quality control issues; then industrial problems when Boeing sought to lay off workers as things slowed down. Then they got really scarred by a month-long strike a few years ago. I suspect they are keen to avoid that sort of cost (both monetarily and to reputation) again and so would rather see a few orders go east rather than make promises they cannot ultimately deliver upon.
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404 Titan Stunning Arrogance
"News To Me"
So if you.... MR Titan..... dont know about something it cant possibly be true.
Pull your head out of your sphincter and attempt to acccommodate another point of view that you may not know about....O omnipotent one.
So if you.... MR Titan..... dont know about something it cant possibly be true.
Pull your head out of your sphincter and attempt to acccommodate another point of view that you may not know about....O omnipotent one.
Bad Hat Harry
I think if you read my post again with a cool head you will realise it was a question. That’s what “?” was for at the end of the last sentence.
And yes your apology is accepted.
I think if you read my post again with a cool head you will realise it was a question. That’s what “?” was for at the end of the last sentence.
And yes your apology is accepted.
404 Titan
I've re-read you posts and come to the same conclusion as Bad Hat Harry, in that you appear to be unable to accept that there is something happening which is contrary to your knowledge of Boeing production lines.
The swapping of B787 slots for B777's was simply speculation by a journalist - nothing credible there. I would think that Qantas would keep every slot on the B787 production line (irrespective of the B777 decision) because they want to replace all widebody aircraft (except A380 of course) with these very efficient aircraft.
My source is very well placed and his opinion is that the B777 order is virtually assured.
The B777 and the B787 aren't assembled on the same line so QF trading some B787 slots won't free up slots on the B777 production line. They are the facts. Sorry to spoil your day and a good rumour.
The swapping of B787 slots for B777's was simply speculation by a journalist - nothing credible there. I would think that Qantas would keep every slot on the B787 production line (irrespective of the B777 decision) because they want to replace all widebody aircraft (except A380 of course) with these very efficient aircraft.
My source is very well placed and his opinion is that the B777 order is virtually assured.
That's funny I thought BA were being offered the 777 in compensation for the late 787?
There can't be that many 777's available to give both BA and QF some.
Maybe I should suggest to my bosses at CX we try to get more 777's too?
After all we are an existing 777-300ER lover and should get first rights to any extras. Not like you late comers !!!!
There can't be that many 777's available to give both BA and QF some.
Maybe I should suggest to my bosses at CX we try to get more 777's too?
After all we are an existing 777-300ER lover and should get first rights to any extras. Not like you late comers !!!!
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My source tells me that there are two very senior Qantas training Captains currently in the U.S. undertaking 777 endorsement training. Keg, any extra info? One is apparently J.B. from the 737 fleet?