Boeing Pitches Stopgap Deal to Win Qantas Order for Delayed 777X
Boeing pitched the workaround as it grapples with holdups to the upgraded 777, CEO Alan Joyce said in an interview in London.
(Bloomberg) -- Qantas Airways Ltd. said Boeing Co. has offered a stopgap deal in a bid to persuade the airline to select its delayed 777X plane for planned direct flights from Australia to New York and London.
Boeing pitched the workaround as it grapples with holdups to the upgraded 777, Chief Executive Officer Alan Joyce said in an interview in London, declining to reveal what the offer entails.
“While the 777-8X is likely to be delayed, Boeing have put a compelling proposition on the table,” he said. “Part of the Boeing proposal is an alternative that gives us a transition to the later delivery of the 777.”
Boeing said in July that the maiden flight of the initial 777-9 version of the upgraded plane had been delayed until 2020 amid issues at engine provider General Electric Co. The first delivery of the jet is now expected in early 2021. The smaller, longer-range -8 variant under consideration at Qantas is due to follow, though the manufacturer has never said when it might appear.
Qantas faces a choice between the 777-8 and ultra-long-range variants of Airbus SE’s A350 as the airline selects a fleet for Project Sunrise, as the plan to eliminate stops on the longest services from Australia is known. Flights are slated to commence as soon as 2022.
The 777-8 offers a more compelling payload proposition on London and Sydney flights, whereas the lighter A350 would be more economical to destinations such as Hong Kong and Los Angeles, providing greater flexibility, Joyce said.
Qantas also plans to order short-haul planes next year and will choose between models including the Airbus A320 and the Max, according to Joyce, who said he’s confident Boeing will safely return the grounded jet to service.
Boeing will be in a strong position to secure the contract if it goes ahead with a new midmarket airplane or NMA, which would be well-suited to the busy Melbourne-Sydney route, he said, though Airbus’s A220 may be a better bet on lower-capacity legs where Qantas will also consider Embraer SA planes.
The order will be for more than 100 aircraft to replace 75 Boeing 737-800s, as well as 20 smaller 717s and 17 Fokker 100s that fly with the QantasLink unit.
Joyce spoke Wednesday prior to the second of three Project Sunrise research flights, scheduled to leave London for Sydney on Thursday.
To contact the reporters on this story: Christopher Jasper in London at cjasper@bloomberg.net;Siddharth Philip in London at sphilip3@bloomberg.net;Guy Johnson in London at gjohnson87@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Brendan Case, Christopher Jasper
©2019 Bloomberg L.P.