Friday, January 13, 2017

Qatar Airways pressures engine maker, sees early Boeing 777-9

Qatar Airways said on Thursday it was seeking guarantees from a potential new engine supplier after delays to Airbus jet deliveries, but said Boeing was ahead of schedule on its latest version of the 777, leaving scope to bring those jets forward.

The comments from one of the industry's toughest buyers reflect the stakes involved in meeting manufacturing targets for large aerospace industry orders after a series of costly delays.

Qatar Airways remains in talks with CFM International about supplying engines for an upgraded order for Airbus Group's A321neo medium-haul jets, which it expects to finalize "soon", Chief Executive Akbar Al Baker told Reuters.

The carrier has cancelled four A320neo jets powered by delayed engines made by Pratt & Whitney, a unit of United Technologies, and plans to swap the overall aircraft order, which originally covered 50 jets, to the larger A321neo.

CFM, owned by General Electric and France's Safran, competes with Pratt & Whitney to power Airbus' medium-haul jets.

Al Baker acknowledged Qatar had received competitive launch prices when it originally ordered Pratt & Whitney engines, but said a decision on whether to keep those or switch to CFM for the upgraded A321neo order would depend on other guarantees.

"It is a factor, but what we decide will be based on what sort of guarantees we get on deliveries and at the same time performance," he said in an interview.

Qatar plans to take delivery of around 10 Airbus A350s and 6 Boeing 777s this year. It will also receive some Boeing 737s on behalf of Italy's Meridiana, in which it aims to buy 49 percent.

Qatar is also one of the launch customers for the newest Boeing long-haul jet, the 777-9, formerly code-named 777-9X.

Boeing plans to deliver the 406-seat jet from 2020, but aviation news site FlightGlobal reported last year it could advance deliveries to late 2019 due to spare cushion in the development schedule.

"We have already told Boeing that as they are bringing ahead the (777-)9X deliveries, we would be interested. The 777-9X program is ahead of schedule and we have no problem if they want to bring our deliveries ahead,” Al Baker said.

A Boeing spokesman said: "Development of the 777X program is progressing to plan and we will deliver to the schedule we committed to our airline customers."


Al Baker was speaking after opening a 1,000-square-metre lounge at Paris' Charles de Gaulle Airport, the airline's third such facility abroad after London- Heathrow and Dubai.

It is also building lounges in Beirut and Bangkok and negotiating space in seven other airports.

The expansion comes as Gulf airlines have seen premium yields suffering due to low oil prices and rising capacity.

Qatar Airways plans to unveil a new premium cabin in March and is investing an unspecified amount to attract passengers "with the right yield," Al Baker said.

But he suggested fuel surcharges may soon be back on the agenda.

"(Qatar Airways) had to lower (prices in 2016) because oil prices were going down, but now we are starting to put prices up because oil prices are starting to go up," he said.

"Soon, I think not only Qatar Airways but most of the airlines will re-introduce the fuel surcharges because they budgeted on lower fuel price and prices are now rising rapidly."

Oil prices have risen 20 percent in three months.

Al Baker said the airline had not seen traffic to France fall after recent attacks. The carrier plans to serve Nice five times per week from July and expects to announce a similar service to Lyon soon.

It also continues to experience double-digit growth in passenger numbers, Al Baker added.

(Tim Hepher - Reuters / Yahoo Business News)

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