Says Six-Month Delay Is Acceptable, But Any Longer Poses A Problem

Once bitten, twice shy... but still optimistic. That's how Qantas CEO Geoff Dixon characterized the Australian airline's attitude towards Boeing's announcement of a six-month, production-related delay to its 787 Dreamliner program.

"Six months we can deal with," Dixon told the Chicago Tribune. "Anything longer will certainly make our life more difficult."

Qantas is familiar with the impact production delays can have on eagerly-awaited new aircraft. The carrier has suffered through a 22-month delay in receiving its first Airbus A380 superjumbo; Qantas now expects to receive its first A380 next August.

The carrier has learned how to deal with such delays... namely, by placing staff close to the planemaker, to keep the pressure on and protect its $12 billion investment.

"We monitor this in Toulouse and in Seattle all the time," Dixon said last month. "Boeing has been quite open with us. They do appear confident that there will only be a six-month delay. But I'd be lying not to say that we have our concerns."

Qantas has the largest single order for Dreamliners to date, with 65 planes. The Australian airline is slated to have 15 787s in its fleet by 2009 -- planes it will use to further international expansion plans for low-cost subsidiary Jetstar.

Some doubt Boeing's ambitious schedule. Teal Group analyst Richard Aboulafia calls the planemaker's chances of meeting its latest schedule "minimal," noting Boeing would need to build more widebody airliners in a year than it has ever done, "all the while figuring out the learning curve, production curve. I think it's a little tough to believe in."

Dixon also has some doubts, though he remains cautiously optimistic. "It's a very, very quick wind up," he acknowledged, adding Qantas is working on a contingency plan in the event a second delay is announced.

"That shouldn't be read as the fact that we do think there will be delays," Dixon said. "But we would be remiss not to have contingencies."

For the moment, Boeing has largely avoided having to negotiate compensation for airlines waiting for the 787... though that situation will change quickly if a second delay is announced.

"If there's going to be further delays, undoubtedly there would be further penalties involved," JSA Research aerospace analyst Paul Nisbet told the Tribune.

Dreamliner program spokeswoman Yvonne Leach dismissed talk of possible concessions as "premature." As for Qantas' plans to watch over Boeing's collective shoulders, Leach said it's SOP for larger customers to place engineers on the ground to keep watch on the assembly process.

"They, like other airlines, are here as part of our natural process for starting up a production line," Leach said.

One point Dixon is unhappy with Boeing on, is the planemaker's reluctance to lock down a final design for a larger version of the Dreamliner, dubbed the 787-10. But he has a backup plan -- the planned -1000 version of the Airbus 350XWB.

The Qantas chief said the airline is in "serious discussions" with Airbus for a large XWB order. "Everything points to it being an aircraft with enough size and range to be very important for not just us but quite a number of airlines," Dixon said of the A350.

FMI: www.qantas.com, www.boeing.com, www.airbus.com