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Qantas cancels $8.5bn Boeing orders

Aug 23 2012 09:52

Sydney - Embattled Australian flag carrier Qantas Airways on Wednesday cancelled orders for 35 Boeing 787 aircraft to cut costs after posting a steep full-year net loss.

The decision represents an $8.5bn reduction in capital expenditure at list prices, it said.

"Qantas continues to practice disciplined capital management and, in the context of returning Qantas International to profit, this is a prudent decision," said chief executive Alan Joyce.

While the orders for 35 of the planes were put off, delivery of 15 787s to its budget offshoot Jetstar will continue as planned, with the first aircraft to arrive in the second half of 2012.

This will enable the transfer of Airbus A330 aircraft from Jetstar to Qantas' domestic service, and the eventual retirement of Qantas' Boeing 767 fleet.

"The B787 is an excellent aircraft and remains an important part of our future," added Joyce.

"However, circumstances have changed significantly since our order several years ago. It is vital that we allocate capital carefully across all parts of the group.

"Qantas has always maintained flexibility in its fleet plan and made changes when required."

The decision was made as the airline posted a full-year net loss of Aus$244m (US$256m), compared to a net profit of Aus$250m (US$262m) in the previous year.

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