Qantas cancels, defers order for Boeing 787s

Boeing's largest airline customer for the 787 said it is canceling orders for 15 Dreamliners and deferring another 15 deliveries by four years.

Qantas Group, the parent of Qantas and discount carrier Jetstar, said Friday in Australia that the changes were driven by the economic climate, not this week's announcement of a design problem that will add weeks or months to the much-delayed plane's first flight.

Qantas has 50 remaining Dreamliners on order, comprising 35 787-9s and 15 787-8s.

"The latest delay is disappointing, but we do not expect it to impact the Qantas Group given these changes to our delivery program," said Qantas CEO Alan Joyce. "We remain committed to the aircraft as the right choice."

The canceled orders are for 787-9s scheduled for delivery in 2014 and 2015; the deferrals are for 787-8s, Qantas said.

A 30 percent slump in corporate travel on some routes has forced Joyce to ground planes, cut jobs and slash earnings forecasts at Australia's largest airline. The changes to the Boeing order follow Qantas' decision in April to defer taking four Airbus SAS A380s.

Qantas placed its original 787 order in December 2005, but "the operating environment for the world's airlines has clearly changed dramatically since then," Joyce said. "The agreement we have reached with Boeing will provide greater certainty going forward in terms of our fleet renewal and growth strategies as well as broader resource planning and matching capacity with demand."

The financial impact of the contract changes was not disclosed.

The first 15 aircraft for Qantas Group — 787-9s for Jetstar's international operations — will now be delivered beginning mid-2013, around three years later than planned, the company said.

Qantas retains options to to purchase up to 50 additional aircraft.

International Lease Finance Corp., with 74 Dreamliner orders, remains the largest buyer. According to Boeing's order Web site, the largest airline customers aside from Qantas are All Nippon Airways with 50, Air Canada with 37 and JAL International and Etihad, each with 35.

Information from Bloomberg News is included in this report