Virgin Australia to lease up to 9 Boeing 737s betting on domestic demand
Virgin Australia appears to have changed its plans about the Boeing 737 fleet reduction. The Australian air carrier stepped into discussions to lease up to nine jets of the type in order to boost the capacity while betting on a rapid recovery of demand for domestic operations.
The Chief Executive Officer (CEO) of Virgin Australia Jayne Hrdlicka revealed that the airline moved a step closer in negotiations over a lease deal of eight or nine Boeing 737 jets to expand its domestic capacity. Speaking to local media on March 16, 2021, Hrdlicka announced that the air carrier was committing to “more aircraft” and she believed the domestic Australian market was “moving off life support”.
“We are committing to more aircraft and we are just really positive about the outlook,” Hrdlicka added, outlining that Virgin Australia expected to reach 65% of the pre-Covid capacity in April 2021 and would try to reach 85% by the mid-2021.
The move to lease additional Boeing 737 planes might be partly encouraged by a spike in the airline’s ticket sales after the recent governmental decision to discount 800,000 airfares in order to prompt the fallen demand for air travel in the country.
The airline initially intended to cut its Boeing 737s fleet from 85 to 56 jets. In September 2020, Virgin Australia announced returning a third of the 737 fleet to lessors as a part of its turnaround plan of the new owner Bain Capital. Following the plan, Virgin Australia should focus on domestic and short-haul international operations with its 737s while competing against Qantas Airways. At the time, Virgin Australia was in talks over the financing terms for 56 of 85 aircraft the airline had before it went into voluntary administration in April 2020.
However, Virgin Australia has already planned to grow its fleet back to 75 Boeing 737 jets when the demand returns. According to the Planespotters.com data, Virgin Australia's current fleet consists of 2 Boeing 737-700 and 57 Boeing 737-800 aircraft with an average age of 9.6 years.
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