Thursday, August 6, 2015

Back In 2005 Dixon-Alan Joyce Thought This For Qantas (Updated)

Qantas had just signed for 65, 787 sending part of the order to Jet Star and then optioning for 50 more, totaling 115. The great recession hit, taking the Boeing star customer downtown to the bank, only to find its balance sheet look liked the recession itself, dire. Qantas woke up with a delusion of grandeur headache, and backed off Boeing by firming on 14 787-8 with Jetstar and opting the 50 787-9 to Qantas. Somewhere Qantas dropped 51 orders off before the Bank drive through leaving Boeing with the embarrassment of cancellation, during its Airplane Wars with Airbus. 

However fast forward, it’s the 2nd half of 2015. The ten years of Qantas regrouping brings hope to Boeing. The never-mind people from Qantas are back to studying routes with the 787-9 as the Qantas "what if" kids on the block can cipher its way into a purchase with Boeing.  

Australian Business Traveler Quotes: From 2005 and on

"Its new technology engines, cutting-edge airframe and increased seat count also offer a significant reduction in costs per ASK compared to the current Boeing 767." Mr Dixon said Qantas' current order was a mix of B787-8 and later model B787-9 aircraft. "When the B787-9 model is ready for service in 2011, it will represent an even greater engineering breakthrough, flying further than the B787-8 but with capacity for 50 additional passengers," he said." 

ASK used in Australia or: Available Seat Miles (ASMs) used in USA; Per MIT Glossary
A common industry measurement of airline output that refers to one aircraft seat flown one (K=Kilometer, M=Mile), whether occupied or not. An aircraft with 100 passenger seats, flown a distance of 100 miles, generates 10,000 available seat miles.

"Mr Dixon said the B787's lighter fuselage, which was constructed from composite material, allowed the aircraft to: 

* fly further with a full payload; 

* burn less fuel; 

* fly faster than any other aircraft of its size; and 

* reduce maintenance costs. 

"The composite fuselage also allows increased window size and a lower cabin altitude pressure that reduces the effects of jetlag." 

Remembering my own School of Business motto, "Time is Money" (not) Lux Et Veritas (Likely).

Time is pushing Qantas. They must of already computed the routes in modeling programs after long ago when receiving inputs for weights, winds, and distances using the Boeing performance data. It’s more likely the route study was completed before this intersection of discussion for the 787-9 vs the A-350, as just announced. 

Remembering, they just dissed the A-350-9 as a no go, because they did a side by side with the 787-9, and it came out as a Boeing win. Thus claiming its Business model and routes traveled suited choosing Boeing 787-9 best.

Australian Business Traveler Quote:

"We looked at both types of aircraft, on what the relative positions of the A350 and Boeing 787 were, and we found on all accounts the 787-9 was the better aircraft for us, for the market that we're talking about and the network that we're talking about" Joyce said."

Therefore, suggesting Qantas is waiting for route outcomes on its study for the 787-9 is only honoring the Santa Clause in its working papers, after backing the decision to go with Boeing. They are checking it twice for the stock holders (Santa Clause)! 

The Sydney Morning Herald Chart

Qantas is avoiding buyer’s regrets for some potential anguished investors buying-in on the upcoming Boeing-deal announcement. In advance they have done its due diligence, and can answer every question with authority. Everything is backed by research, planning and conclusions. The only thing(s) lacking is a Boeing-deal, is a Qantas implementation of its plan for it to become a reality instead of just a Dream.