Qantas orders six more Boeing 787 Dreamliner aircraft as jumbo jets bow out

Qantas is looking to build up its supply of 787-9 jets, which are more fuel efficient and have lower maintenance costs. (Reuters)
Updated 02 May 2018

Qantas orders six more Boeing 787 Dreamliner aircraft as jumbo jets bow out

SYDNEY: Australian national carrier Qantas on Wednesday ordered six Dreamliner planes from aviation giant Boeing to replace the last of its aging jumbo jets, which have been a staple of the firm’s fleet since 1971.
The deal, worth $1.7 billion at list prices, comes as Qantas looks to build up its supply of 787-9 jets, which are more fuel efficient and have lower maintenance costs.
To date it has taken delivery of four and a further four are due to arrive by the end of 2018. The latest batch are due by the end of 2020.
“This really is the end of one era and the start of another,” said chief executive Alan Joyce.
“The jumbo has been the backbone of Qantas International for more than 40 years and we’ve flown almost every type that Boeing built.
“It’s fitting that its retirement is going to coincide with our centenary in 2020.”
He added that the “better economics and a longer range” have allowed Qantas to open up new routes like Perth to London.
“With a larger fleet of Dreamliners, we’ll be looking at destinations in the Americas, Asia, South Africa and Europe,” he added.
The announcement was made as Qantas revealed in a trading update it was on track to post a record full-year underlying profit before tax of A$1.55 billion to A$1.60 billion.
The result, slated to be officially released in August, comes on the back of an aggressive efficiency drive that has included hefty redundancies and a shift away from loss-making routes, despite rising fuel costs.
“We’re seeing solid results from each of our business units, which is a reflection of broadly positive trading conditions and the work we’ve done to strengthen the group,” said Joyce.


Microsoft shares fall 4% after warning of coronavirus hit to supply chain

Updated 28 February 2020

Microsoft shares fall 4% after warning of coronavirus hit to supply chain

  • Drop in share price wiped off nearly $50 billion from the Microsoft’s market value
  • Apple was the first big technology firm to come out and say the virus was affecting its production and demand in China

NEW YORK: Shares of Microsoft Corp. fell more than 4 percent on Thursday after the company warned of weakness in PC business due to a hit to its supply chain from the coronavirus outbreak, echoing similar statements from Apple Inc. and HP.

The drop in share price wiped off nearly $50 billion from the Microsoft’s market value on a day when broader markets were down more than 2 percent.

The virus has so far infected about 80,000 people, killed nearly 2,800 and spread to 44 countries, after originating in the central Chinese city of Wuhan late last year.

Apple was the first big technology firm to come out and say the virus was affecting its production and demand in China. PayPal Holdings Inc. and Mastercard Inc. have also warned about a possible hit.

Microsoft said on Wednesday its supply chain was returning to normal operations at a slower pace than anticipated and its Windows and Surface computers had been more negatively impacted than expected.

“Finished good inventory levels matter. If Microsoft had not fully assembled and packaged Surface units in the channel, then the impact would be felt faster and more severely,” Morningstar analyst Dan Romanoff said in a mail.

The global stock markets have also taken a hit as investors grew cautious of the impact of the virus on global supply chains. The Dow Jones Industrials index dropped more than 400 points at the open on Thursday.

Several Wall Street analysts expect other technology companies with heavy presence in China to soon come out with their own statements.

“Given there seems to be weakness in the PC supply chain, it would seem highly likely to me that we hear something from Intel,” Atlantic Equities analyst James Cordwell said in a mail.

Andrew MacMillen, an analyst with Nucleus Research, said that PC makers such as Dell Technologies Inc. and Lenovo Group could be seeing some difficulties.

Dell, the world’s third-biggest PC maker after Lenovo Group and HP, will report quarterly earnings after market close on Thursday. It has a sizeable exposure to China.

Microsoft said on Wednesday it would miss its own third quarter revenue forecast for the PC unit, which houses Windows, of $10.75 billion and $11.15 billion. 

J.P.Morgan analysts said that Microsoft’s guidance is a supply chain issue, not a demand issue, but it was possible that broad supply chain issues plus investors becoming increasingly averse to risk could metastasize into demand issues over time.