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Originally published August 22, 2012 at 4:50 PM | Page modified August 22, 2012 at 6:08 PM

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Qantas drops order for 35 Boeing 787-9s

The troubled Australian airline is keeping options for 50 of the larger Dreamliners, and moving those forward.

Seattle Times aerospace reporter

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You do what you've gotta do, I guess, if you don't have any money. I hope it works out... MORE
Qantas airline is not the first airline that has cancel or delay an aircraft orders ... MORE

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Troubled Australian airline Qantas announced Wednesday that it has canceled firm orders for 35 Boeing 787-9 Dreamliners.

Those jets are worth $8.5 billion at list prices, though according to market data provided by aircraft valuation firm Avitas their true value after typical discounts is about $4.6 billion.

The Qantas announcement followed its disclosure of a $256 million loss for the year ended June 30.

Qantas softened the blow to Boeing by stating that it will retain, and bring forward by two years, purchase rights and options for 50 787-9s. If those purchase rights are converted later into firm orders, they would start delivery in 2016.

But even then, that would be a two-year delay compared to the previously planned first delivery of the 787-9 to Qantas.

"The B787 is an excellent aircraft and remains an important part of our future," Qantas chief executive Alan Joyce said in a statement. "However, circumstances have changed significantly since our order several years ago."

The airline still has an order for 15 of the original Dreamliner model, the 787-8, on its books. Joyce said those jets will begin delivery in the second half of next year and will be operated by Qantas subsidiary Jetstar for intra-Asia regional air travel.

The larger 787-9s are intended for long-range, international Qantas flights. Joyce's restructuring strategy calls for big reductions in near-term spending on the long-haul fleet. In May, Qantas deferred delivery of two giant Airbus A380 jets by three and four years.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

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