Friday, October 7, 2016

Qatar Airways orders 100 new Boeing aircraft

Qatar Airways officially announced today a major new order for 100 Boeing aircraft valued at US$ 18.6 billion. The breakdown of the aircraft purchased is as follows:
  • 60 Boeing 737-800MAXs
  • 30 Boeing 787-9s
  • 10 Boeing 777-300ER


The B738s ordered are not for mainline QR but rather for their recently purchased 49% stake in Italy's Meridiana Airlines. 

The order for 30 B789s is really pleasing to see and hopefully it will have crew rests installed on board thus enabling it to be used on long haul flights as currently their B788s are not permitted to. The B789 is an ideal aircraft from both a pax + cargo capacity stand point to operate to BOS, ATL, PHL (instead of a costlier B77L) as well opening up new routes such as LAS, SEA, MCO, DTW, BNE, SCL and BOG. 

For the future planning purposes too (2020 onwards), it is better to have a double daily B789 service to cities like ORD and MEL in particular versus B77Ws. 

Once Meridiana stabilizes under the new QR commercial ownership, I expect at least 10 B789s to be transferred to them to operate on key high volume Italy-trans atlantic and Italy-SE Asia routes. In this way, the airline will have a nicely streamlined standardized fleet of B738MAXs for EU flights and B789s for high demand long haul services. QR should let AZ focus on FCO and make Meridiana Milan's hometown airline and in turn create a niche for themselves. People across the world associate Alitalia with Rome and not Milan anymore hence this is a good opportunity for Meridiana to differentiate themselves. The high volume long haul market segments out of Milan are New York, Shanghai, Beijing, Hong Kong, Tokyo, Sao Paulo, Dubai, Bangkok, Delhi and Male.

Another option for QR to consider if they want to retain the entire 30 B789s is to use them to directly replace their 30 B788s as the resale value of the B788 will depreciate rapidly 2020 onwards as airlines are preferring to up size and maximize their returns by getting more B789s. QR would find buyers between 2020-2022 for their B788s as they would be between 6-8 years maximum or they can lease them out/transfer to one of their investment carriers. 

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