Tigerair to retire 2 Airbus A320 in shift to all Boeing 737 fleet
Tigerair Australia will retire two of its fourteen Airbus A320-200 by mid-2020, Virgin Australia, its parent company, announced on November 6, 2019. The retirement is part of continuous effort to “be focused on transitioning” to an all-Boeing 737 fleet. The airline currently has six 737-800s.
Currently, Airbus A320-200s are both dominant and newer planes in the airline’s fleet. In the mixed fleet of 16 aircraft, there are ten Airbus A320s, the average age of which is 9.4 years, and six Boeing 737s (average age over 13 years), planespotters.net data reveals.
All Tigerair Australia Airbus planes are leased, contrary to Boeing 737s of which only one is listed as such, the information in the same source shows. The lease terms of Tigerair aircraft has continuously been listed in Virgin Australia's financial reports under “onerous and unfavorable contracts” section, meaning that costs related to honoring the contract are deemed as higher than expected benefits from it.
“As part of the acquisition of Tigerair Australia, the Group recognized a provision for unfavorable aircraft lease terms of $23.5 million,” Virgin Australia states in multiple reports, adding that the last lease expires in October 2021. The group first acquired Tigerair shares in 2012 and took full control of the airline the following year.
Tigerair Australia has already removed four A320-200s from its fleet in 2018-2019 (planespotters.net data), while the last time it took delivery of the type was back in 2015. In the same year, it began adding Virgin Australia’s Boeing 737s, with two planes arriving in 2019.
Virgin Australia also plans to retire three Fokker 100 aircraft from its regional airline’s fleet. The decision came after a review of the regional airline fleet strategy and is expected to be executed by March 2020. Virgin Australia Regional flies 14 Fokker 100 planes, based on planespotters.net data, the average age of the aircraft is 27.5 years.
The 2019 financial year was a “challenging period” for the Virgin Australia Group, as it reported a $315.4 million loss ‒ an improvement from $653.3 million loss in 2018. Since March 2019, the group is led by new Chief Executive Officer and Managing Director Paul Scurrah. In August 2019, the company announced several initiatives to control costs, including organizational “rightsizing” program (under which it is reducing 750 roles) and key supplier contracts renegotiations. The group is undertaking reviews of their fleet, network and capacity.
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