Virgin Australia: fewer 737s, uncertain on 737 MAX, twin-aisles
Virgin Australia, which is still operating under voluntary administration conditions, confirmed that its future does include fewer Boeing 737 aircraft. Whether that future will involve the 737 MAX or any wide-body aircraft is still uncertain, according to an airline’s spokesperson.
In August 2020, the airline announced its future structure as it planned to exit voluntary administration under its new ownership of the U.S. based investment firm, Bain Capital. Virgin Australia specified that it will phase out its Airbus A320 (ex-Tigerair) and A330 aircraft, ATR 72 turboprops, and Boeing 777 jets, as the airline would refocus on its “core domestic and short-haul international business”.
Now, the company also indicated that its all-Boeing 737 fleet will be reduced in size, as it would go from 75 aircraft to 56. According to Virgin Australia’s chief operations officer (CCO) Stuart Aggs, the carrier’s capacity would be roughly 75% of its pre-coronavirus domestic Boeing 737 capacity. Thus, the airline’s fleet composition will allow it to have a “solid ramp-up plan when demand returns,” added Aggs. If the demand is there in the long-term, the company plans to have more than 75 aircraft under its AOC.
“To do this, we’ll be taking advantage of the current aircraft market for used 737s. We expect to see opportunities to secure additional aircraft over the coming months when demand returns and we will actively monitor this,” commented Aggs, as reported by Executive Traveller.
The company was also successful in negotiating lower lease rates on its remaining 56 Boeing 737s, reducing Virgin Australia’s operating costs. However, negotiations with Boeing over the pending delivery of 40 737 MAX aircraft are still ongoing, confirmed a Virgin Australia spokesperson, adding in that the airline will provide an update on its MAX order “in the coming months.”
Its first Boeing 737 MAX delivery is due in July 2021.
While Virgin Australia suspended long-haul flights until demand recovers, its announcement in early-August 2020 remarked that the flights remain an “important part of the plan.” In its update to creditors, Virgin Australia noted that it contacted lessors of Airbus A330 and Boeing 777 aircraft and notified them of the fact that the company will not retain these aircraft, including the Airbus A320 and ATR 72s.
According to the airline’s representative, the carrier “would be talking to aircraft manufacturers about possible replacements for its A330s and B777s,” without indicating any potential aircraft types to replace the outgoing wide-bodies.
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