Qantas Cancels $8.5B Boeing Dreamliner Order

Dismal results at Australia’s Qantas Airways mean that Boeing (NYSE:BA) will take a financial hit, too.

After posting an annual loss of A$224 million for fiscal 2012, the company’s first loss in 17 years, Qantas announced a series of cost cutting measures, Reuters noted.

That included the cancellation of an order for 35 Boeing 787-9 Dreamliner commercial jets. The order had been valued at $8.5 billion.

Shares of Boeing slipped more than 2% in Thursday morning trading.

Analysts noted that the Dreamliners would have been put into service on Qantas’ international flights. Since Qantas is struggling to compete with other carriers in international travel, the order’s termination was “not surprising.”

Qantas officials said the airline would accept delivery of 15 787-8 jets in the later half of next year. It would also bring forward an option to buy 50 Dreamliners to 2016.

Boeing representatives noted that Qantas remained a “valued” customer.

Last month, Boeing announced second-quarter earnings and revenue that topped Wall Street expectations and raised its full-year forecast for airplane production. The company is widely predicted to beat European rival EADS Airbus in airplane deliveries this year.

Article printed from InvestorPlace Media,

©2021 InvestorPlace Media, LLC