Australian Qantas Airways flagship carrier cancelled the order for 35 Boeing Dreamliner jets in an attempt to cut costs.
“Qantas doesn’t have many options left to conserve capital other than by delaying or cancelling orders and staying with a older fleet, ” said David Liu, head of research at fund manager ATI Asset Management.
The company has already reported a full-year net loss for the first time in the past 17 years. Investors welcomed the company’s moves to cut costs, which made Qantas shares reach their highest level in more than two months. Over the past months ended June 30th, the flagship carrier reported a loss of $254.80 million, due to rising competition, a record fuel bill and the opposition of the labor union to cut costs.
“Given lower growth requirements in this uncertain global context, Qantas is cancelling orders to buy 35 Boeing 787-9s,” said Chief Executive Alan Joyce.
Boeing declared that the news was a major blow for the company as Qantas was a ‘long-standing and valued Boeing customer.’ Qantas currently has 308 aircraft, but will still buy 15 Boeing 787-8s in the second half of 2013 for its Jetstar subsidiary.