Qantas Airways Limited (ASX:QAN) is cancelling its order for 35 Boeing 787-9 aircraft, the Australian airline announced Thursday, dealing the Boeing Company (NYSE:BA), which makes the advanced aircraft, a cut in sales of as much as $8.5 billion.

The cancellation is the biggest ever for the 787, Boeing's newest airplane, and it is part of a larger restructuring of the Australian flagship carrier's business strategy, Qantas Group CEO Alan Joyce said, citing lowered growth expectations due to a weaker global economic outlook.

Shares of the company, which has a fleet of 308 aircraft, rose 2.56 percent in Thursday trading, while Boeing shares fell 2.84 percent.

Qantas is keeping 15 firm orders for the smaller 787-8 variant, designed to fly approximately 250 passengers on the longest inter-continental nonstop routes.

The airline's chief financial officer, Gareth Evans, said that Qantas will get back deposits from Boeing that it had made on the canceled 787-9 orders, for a total of less than $100 million. But Boeing was also three years late in delivering the first 787s to airlines, meaning that Qantas will get its first ones in 2013 -- and that it will therefore get a $300 million compensation from Boeing for the delay.

Bloomberg News reported that Boeing has lost orders for 25 Dreamliners this year, while 25 more were cancelled in 2009. Cancellations of such large orders are rare in the air transport industry, and Boeing says it still has 800 orders in hand for the jet.

The 787 entered service last year with Japan's All Nippon Airways after a series of delays due mostly to problems with parts produced by subcontractors, and also due to the difficulty of creating production processes for an airplane made largely of composite materials, as opposed to aluminum.

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