Qantas Frequent Flyer - Cost of A380 travails $180 million

QF is paying AUD 80 million and others paying AUD 100 million (to repair the plane, unspecified split between insurers and RR or Airbus). Now we know what an uncontained engine explosion without a crash or injury is worth :)

Hmmm....nice and transparent.
I wonder if this will stop people from saying that QF only repaired the plane to keep intact their reputation for not having a jet hull loss.....nah people like A.nutters will keep saying that as the gospel.

QF is paying AUD 80 million and others paying AUD 100 million (to repair the plane, unspecified split between insurers and RR or Airbus). Now we know what an uncontained engine explosion without a crash or injury is worth :)

I wonder why QF are ponying up $80 million. Maybe they have agreed to share the pain for other considerations. ie a sweeter deal for future engines or such.

When I read the article, I interpret it as Qantas' business costs were $80m and the physical repair costs are $100m.

http://www.smh.com.au/business/engine-blowout-cost-80m-qantas-20110217-1ax5d.html?rand=1297898997823

The $80 million is the cost of the disruption, and is a charge against EBIT (so a cost to QF) but not a payment by QF to a specific 3rd party (though lots of payments were involved, to hotels, staff, and even pax). The entire repair cost is covered by insurance and non-QF payments. $100 million is approx half of the acquisition cost of a new A380, even with the hefty discounts that QF gets (I think list is over $300 million with engine and fitout costs). Much more economic sense to repair it (than the 744 repair which did cost QF money and was more than replacement cost).

The $80 million is the cost of the disruption, and is a charge against EBIT (so a cost to QF) but not a payment by QF to a specific 3rd party (though lots of payments were involved, to hotels, staff, and even pax). The entire repair cost is covered by insurance and non-QF payments. $100 million is approx half of the acquisition cost of a new A380, even with the hefty discounts that QF gets (I think list is over $300 million with engine and fitout costs). Much more economic sense to repair it (than the 744 repair which did cost QF money and was more than replacement cost).

Ha depreciation umm............................

Much more economic sense to repair it (than the 744 repair which did cost QF money and was more than replacement cost).How much did the repair to VH-OJH cost?
List price (2007) of a new 744 was US$228 million.

How much did the repair to VH-OJH cost?
List price (2007) of a new 744 was US$228 million.
Also how long did it take to repair it vs. acquiring a new 744, loss of revenue would be a factor as well.

Also how long did it take to repair it vs. acquiring a new 744, loss of revenue would be a factor as well.Used 744s were available with less than 1 month delivery time; and for less than half the repair cost for comparable age airframe. Insurance only covered that, QF paid out of pocket the balance (over half the repair cost, think it was about $100 million charge to QF from dim memory). Not sure that Boeing was taking any orders for new 744s then, as the 747-8i was being marketed (and is now rolled out, a few years later). Don't think the actual charges were ever listed in any QF security filings (which would be auditable). Makes for good legend, though :) The A380 costs are having to be much more transparent, for lots of reasons (starting with the RR court case).

Used 744s were available with less than 1 month delivery time; and for less than half the repair cost for comparable age airframe. Qantas doesn't have a good history when it comes to acquiring used 744's. (Ugly sisters, anyone?)

Dave

Used 744s were available with less than 1 month delivery time; and for less than half the repair cost for comparable age airframe. Insurance only covered that, QF paid out of pocket the balance (over half the repair cost, think it was about $100 million charge to QF from dim memory). Not sure that Boeing was taking any orders for new 744s then, as the 747-8i was being marketed (and is now rolled out, a few years later). Don't think the actual charges were ever listed in any QF security filings (which would be auditable). Makes for good legend, though :) The A380 costs are having to be much more transparent, for lots of reasons (starting with the RR court case).

Wasn't the BKK incident around 1999? I don't think the 747-8 was being marketed at this stage...if it was, it was only as a concept. Boeing was concentrating on trying to get the sonic cruiser concept off the ground.

And QF ordered the 747-400ER in 2000 for delivery in 2002, so they could have ordered a new 747-400 if they wanted to.

I was responding to the 2007 list price quoted, so used 2007 pricing and availability -- of course that is irrelevant to a 1999 crash. Hard to keep those dates straight, with the literally dozen incidents that QF has had lately. In any case QF is now talking about buying 777-300ERs for their 744 replacements (in 2017, when 3 of the remaining 9 744s will age out); so even today QF is not interested in the 747-8i. How sad.

In any case QF is now talking about buying 777-300ERs for their 744 replacements (in 2017, when 3 of the remaining 9 744s will age out); so even today QF is not interested in the 747-8i. How sad.

Any insight into why not? Will be sad to see the 747 phase out, although that said, the 777 is a beautifully well-proportioned frame.