Qatar Airways has 30 Boeing 787-9 aircraft on order, and the airline has just taken delivery of several of these… surprisingly.
Continue reading: Qatar Airways’ Unusual 787-9 Deliveries
Share your questions, experiences, and thoughts below.
Do we know where they'll be sending the 789s to? I suspect LHR is a likely suspect, as always we get the new toys. Routes previously served by A340s, like KUL?
It's hard to say that there's a financial motive here, since as per US GAAP accounting rules, revenues, expenditures, and profits are booked at the time of sale (minus a small reserve). More likely something like bragging rights at Qatar. They seem to be into that sorta stuff.
@ A Guy -- It doesn't even necessarily have to be financial, but it could just be that Boeing wants to say that they've made X number of deliveries before the end of the year, so it makes them look better.
Us equity people don't really care about delivery numbers (I manage investment portfolios for a pension; full disclosure, we do own BA, but underweight it relative to benchmark) . At this point, might as well kitchen sink the year and pray for better in 2020...
Hey Ben, it’s so Boeing can say they’ve hit their yearly target for deliveries for 787’s. Paine Field has looked like Doha with so many Qatar airplanes parked in delivery stalls lately. Seats are BFE (buyer furnished equipment) and will most likely be installed by Qatar, Boeing, or another MRO they’ve contracted with.
I think Qatar will equip its Qsuites in Doha and will not fly back to the US. As QA777s upgrade its Qsuite were done here in Doha base. Similarly it will be the same thing.
There could be political considerations here, as Boeing is one of the US’ largest - if not the largest - exporters. Getting these planes out of the country before year-end could have a (small) impact on the US balance of trade for 2019.
Planes don’t have to be physically delivered to the customer’s home base in order for Boeing to formally deliver them on the books.
ANA had some 77Ws that went off the production line (after flight tests) directly into storage at MWH or VCV and Boeing was able to mark them as delivered on the books.
I think the key is whether the planes have been paid for or not - even if the plane gets towed to an apron and sits at PAE for months Boeing can chalk the plane up as delivered.
"The reason the planes are delayed isn’t because any issues on Boeing’s end"
It is at least partly because Qatar has refused to take any further 787 from South Carolina as they have severe quality issues at that production line. Of course the QSuite adaption delay is on top of that and more significant.
Operational considerations too. The final test flight, the acceptance flight, is typically carried out by only the most senior management or examiner pilots in the airline. Meanwhile the delivery flight can be performed by regular pilots. Sometimes better to send the top pilots there for a few days to do multiple acceptance flights, rather than accepting only one aircraft, having management / examiners fly the new plane home, and then have them fly all the way back to Seattle to do it all again.
Not sure if it's the case here or not, but sometimes the reason.
Delivery numbers in of themselves may not be material, particularly from equity view, but depending on terms there could be a cash flow and balance sheet impact from delivery and receivables and ever bit helps with the max delay. On debt side there could be covenants impacted off those metrics as fiscal year is ending.
This is an unrelated example of the oddities that can occur on delivery flights. When SAA bought their A340-600’s from Airbus, each one departed Toulouse northwards over U.K. airspace for contract signing as a U.K. company had financed them before flying southwards to JNB. Additional fun fact, these were originally destined to Swissair.
They certainly seem to like to have a couple of every widebody in production - even have a C-17 in their colours .
It clearly suited one party, or both, to do what they are doing. Probably a book-keeping thing for Boeing as I can't see any benefit for Qatar to accept new aircraft they cannot put into service immediately. Probably offered a financial sweetener to do it.
@ Alfredbali: I think you nailed it. None of the export balance sheet/cash flow explanations make much sense to me. On the other hand, Boeing halted MAX production at least partially because it ran out of parking space, and you can park at least two 737s on every 787 stand. Mystery solved.
@ Ben, I don't know where you heard the rumor, but my guess is that the planes will not be flying back to the US for further fit-out; that just wouldn't make any sense. Boeing and QR probably found another location where the work can be done.
They're now all airborne again out of DOH en route to VCV-Victorville for storage. Seems a long way around, but there you go.
When the plane is delivered to the customer, the payment is made within the hour.
The aircraft are on their way back DOH-VCV today, while the remaining deliveries are en route from PAE-DOH simultaneously.
I wonder if the PAE-DOH, then turning around to DOH-VCV are due to flight freedoms - seeing the planes are already registered as Qatari aircraft.
When it comes to aviation, Qatar airways wants the best experiences for her passengers the more reason why QA is delivering state of the art aircraft machines...bravo emir of Qatar King Tamim
Those four 787’s are now on their way to Victorville as I type this. They are due to arrive at ~9:00 a.m.
“Yesterday four Qatar Airways 787-9s flew from Paine Field to Doha, almost one behind the other.”
“Qatar Airways will take delivery of seven 787-9s in the next couple of days, before the end of the year, so we can expect another four to fly to Doha.”
4 + 4 = 8.
This is all wrong. I work for the QA our beloved airline. This plane coming over delayed because of IS Boeing delays. It is in contract to deliver early INCLUDING all interiors per construal obligation. US Boeing decide to fly plane out to Doha and not ready not QA decision but US Boeing for their own policy. Maybe someone talk to them on late delivery schedule, bad quality and flying to Doha not ready. We will not take delivery without complete interior. US Boeing wasting environment not our bel in beloved AA. You should ask your US Boeing airline on issues and reasons
It's likely because boeing is running out of room at paine field. All the 777x are starting to pile up and there were around 15 787s on the flight line, the 777 legacys have been being worked on in the fuel dock because there was no other room for them.
The only thing that makes sense is they want to test out certain characteristics of the planes & also the fuel efficiency of the engines. If its not as per the purchase order specs then they turn around & fly it back, hand the keys over & say "here, you fix it. We don't muck around waiting for you to fix it in the field."
If they can demand that their planes be built in Seattle then they are important enough to hand the planes back.
Just look at the problems Emitates is having with their Rolls Royce engines. Qatar doesn't want the same problems.
@A Guy no, both GAAP and IFRS mandates accrual method.. which recognize revenue after transaction is completed i.e. when the product is delivered to customer (handover of responsibility). GAAP allows small business to choose between accrual or cash method tho, but boeing isn’t one of them.