Sunday, February 22, 2015

240 787 Delivered It's Reorder Time

Back in the day, about two years ago, "Winging It", predicted 2015 as a 787 reorder resurgence. One reason is for the extinction of glitches. A second reason is the reduction of the 787 order book. The 787-8 is 50% delivered in just three years. Another three years the 787-8 will be completely open for airline fleet expansions, within an airlines five year plan.. What Boeing has is production slots available for the 787-8 in reasonable fashion. One Airline who sits on its heals can option in rather quickly, when it identifies its fleet expansion opportunities. It sits just outside the China market. It is centered within the Asia region. The 787 design is a handmade design for the region. Who is it?

Better question:

Does Qantas have the nerve? If they do they need to convert its 787-8 options into a game changing order sooner rather than later, because Boeing has gone over the manufacturing hump. Boeing no longer has the supply chain uncertainty, nor does the errant battery problem come into any sales meeting conversations. Its main selling point is 20% better fuel, and it really works as advertised. You the buyer get to pick the colors. Qantas should not, or better stated, "will not" drop the ball unless they really want to remain an Icon of Australia's past, but it is not a standard in the world of travel. Unless Qantas has a big vision!

Qantas has:

Criky: 

Qantas versus Growth revives aviation-trade policy issues

"The key to that good news could be a decision to exercise some of the bargain priced options it has held since late 2005, when it first ordered or optioned up to 115 Boeing 787 Dreamliners."

"At the moment one of the key disadvantages for a “little” or “cautious” Qantas, no matter the quality of those arguments, is that Qantas is seen in trade and tourism quarters as attempting to stand in the way of this growth, saying “Not until I’m ready”."

The problem here is whether Qantas is a serious player in this moment of aviation history. Do they risk profits from lower fuel prices on a fleet full of the 787's? They obviously don't have those 115 on paper anymore, but do have a sizable chunk with Boeing's sales options. Just like a crime drama on TV its all about mode, means and opportunity before pulling the trigger on an order. Qantas has the means and the opportunity, but are they not motivated, or just scared to pick the phone up and ask for a meeting with Boeing sales department?

I "think" , they are ready during 2015 for making a move. The stars have aligned as risk on the 787 has abated. The performance numbers have been substantiated. Everybody says 20% less fuel needed for every NM flown. Qantas needs a mixed bag of tricks with the half and half order of 25 787-8s and 25 787-9 and maybe 10 more 787-10's. This will certainly make Qantas a force in the region. They can start receiving aircraft in five years. They actually need an order placement or they will slide further down the airline final approach slope in its history.

A change is in process for Qantas. Status quo doesn't work at this point. Even though they have the order placement reserved or "the means", and they have the opportunity of Boeing backlog shrinking. They just lack a motive or in this case the courage to join the Big Boys of the airline travel industry at a critical time. Waiting for any tailwind will have competitors landing in the region in numbers before Qantas can recover the market. If Qantas waits out on narrowing the risk and reward band they will become a Pan Am sentiment for National Geographic pictures. Qantas has the aircraft in view and it has the plan in hand, but it lacks the fortitude or a belief in its abilities and contains fears of failure. So will they cautiously consider more 787 without confidence in itself, as the world flies by and swoops in on another final approach, but with a different livery than Qantas?