Virgin Blue signs major aircraft deal

[Kurt A]

Thursday 1 April 2010, Brisbane, Australia: Virgin Blue Group confirms it has just formally signed an agreement with aircraft manufacturer Boeing, for up to 105 brand new 737 aircraft.

This consummates the in-principle agreement, which was signalled at the recent half year financial results briefing. The transaction has been in negotiation for nine months and its completion constitutes the biggest aircraft order in Virgin Blue’s ten year history and the Boeing Aircraft Company’s largest order in the past 18 months.

The agreement includes 50 firm B737-800NG aircraft (with flexibilityto convert to either B737-700or B737-900), 25 additional firm delivery positions secured as options and 30 future purchase rights. Delivery is scheduled from June 2011 through to 2017 and delivery options negotiated will provide important flexibility to manage movements in market conditions, to aggressively ensure market share is not eroded and to provide additional growth options at Virgin Blue’s discretion.

A significant percentage of the aircraft is intended for replacement of the existing narrow body fleet, while the remainder will be deployed to new routes and to boost frequency where demand dictates.

Virgin Blue Chief Executive, Brett Godfrey, said, “Securing this agreement now places Virgin Blue in a strong position to prepare for steady future growth as domestic and short haul markets recover. It will also ensure a turnover of aircraft to maintain the youngest fleet of modern aircraft which is crucial for maintaining our commitment to on-time performance and the lowest cost base possible.”

The new aircraft order will deliver a further reduction in operating costs to manage the airline’s future cost base, maximise reliability and continue to bring to market modern airline products and services. The deal includes aircraft with the latest technology under the Boeing Performance Improvement Plan, which will also help the carrier maintain its commitment to reducing its carbon footprint, via initiatives including engine improvement and enhanced aerodynamics. The aircraft will be delivered with Boeing’s new sky interiors with inclusions such as newly designed seats and IFE which will complement Virgin Blue’s ‘Airline of the Future’ initiative to be rolled out during 2011.

Brett Godfrey added, “Virgin Blue was fortunate to see the opportunity and be in a position to take advantage, of the downturn in the market as we did back in 2001, to secure long term future supply of aircraft on attractive commercial terms. Pricing cannot be disclosed but importantly net pricing is improved from 2001 levels, allowing for a lowering of the fleet’s cost base. We expect to finalise our funding arrangements for these aircraft shortly.”

-dj

[Andrew M]

Very glad they are going with the "Sky Interior"

This will finally bring the B737 up to and probably in-front of the A320 interiors which are much nicer

[Will H]

Surprised the 737-900ER was left out of firm purchases after all the talk.

But perhaps the 739 demonstrator, if correct, will make some conversions occur.

[Steve Grayson]

The -900 is still out there as dorment order.. On top of that I have found out that the only reason the T7 was not ordered for Dom Ops was the inability of SYD, BNE and MEL Dom Terminals to accept their large footprints. IATA says the T7 will take up 2.4 of their bays and they are not willing to change for us.
DJ is now looking at an infill of an 767/A330 size a/c to allow is to fly 250 ish pax on our trunk routes...
One last update from the Coffee Club is that we are ramping up to have about 140 a/c by 2015 ad onwards to 180 by 2017
It's gonna get busy.....

[Arthur T]

The statement by Virgin Blue also states about their committment to have new seats and IFE on board their aircraft. I just wondering whether they will follow suit of their sister Airline Virgin America to introduce Panasonic eX2 touch screen with an in seat ordering system.

They may become a major threat to Qantas for its new interior and hope Qantas can do something to renew their Boeing 737 Fleet and even get some new aircrafts to replace B763ER before it is too late.

[Nigel C]

Renew the Qantas B737 fleet??? Had you not noticed that 95% of their fleet is already NG gear???

And just what is the issue with the B767 fleet that any delay in their replacement might make it 'too late'?

[Ash W]

Originally Posted by Arthur T

Fleet and even get some new aircrafts to replace B763ER before it is too late.

They have the 7late7's on order to replace the 767's.

[Nigel C]

Originally Posted by Steve Grayson

The -900 is still out there as dorment order.. On top of that I have found out that the only reason the T7 was not ordered for Dom Ops was the inability of SYD, BNE and MEL Dom Terminals to accept their large footprints.

You could bung a B772 on Bay 49 at T2 at YSSY, but it would probably take out Bay 51. It used to take B743's when Ansett was around, and I think the NIGs and lead-in line are still in place.

[Gareth U]

Qantas has used Gate 43 for SYD-CNS flights on the 742, post AN collapse.

[Will H]

Originally Posted by Steve Grayson

The -900 is still out there as dorment order.. On top of that I have found out that the only reason the T7 was not ordered for Dom Ops was the inability of SYD, BNE and MEL Dom Terminals to accept their large footprints. IATA says the T7 will take up 2.4 of their bays and they are not willing to change for us.
DJ is now looking at an infill of an 767/A330 size a/c to allow is to fly 250 ish pax on our trunk routes...
One last update from the Coffee Club is that we are ramping up to have about 140 a/c by 2015 ad onwards to 180 by 2017
It's gonna get busy.....

Had the 777 order eventuated, that would have raised a number of interesting questions: have a dedicated domestic fleet (in which case buy old -200As or -300As at good prices or buy new jets)? or interchange the a/c with V, in which case the a/c would be premium heavy for domestic routes.

The 767/330 need is a quandary. I don't see DJ going to Airbus, yet Boeing can't offer much with the 767 at the end of its life and the 787-3 all but nixed.

You can get 215 pax in a single-class config in the 739ER. Are 35 more seats worth introducing a new type of a/c?