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Aviation Industry

Virgin Australia on track for 2019 737 MAX delivery

08/11/2018

Virgin Australia is on track to receive its first Boeing 737 MAX aircraft in November 2019 and is not considering further delays to the delivery date.

In early 2017 the airline postponed the MAX deliveries, which were originally scheduled to begin in September or October of this year. The carrier now believes the revised 737 MAX timetable is appropriate and will not delay deliveries to boost its financial position, CEO John Borghetti said during a teleconference following Virgin’s annual general meeting.

The airline is scheduled to receive 30 737-8s and 10 737-10s. The aircraft will primarily be for fleet replacement, although some will also be for growth, Borghetti said.

The “economics … don’t make sense” to delay retirement of the airline’s 737-800s any further, Borghetti said. The carrier does not want to be in a position of operating 25-year-old aircraft and then facing a “tidal wave of capital expenditure” Higher fuel burn and increased maintenance boost the cost of operating older aircraft, he said.

However, Virgin continues to upgrade its fleet of more than 80 737-700s and -800s. The carrier has installed onboard Wi-Fi on more than 60% of the domestic 737s, and the remainder are scheduled to receive the upgrade by the end of February 2019, Borghetti said. Installation on Virgin’s Airbus A330 fleet will be completed by September 2019.

Regarding subsidiary Tigerair, Borghetti said the LCC’s transition from A320s to 737s will take three to four years. Tigerair operates 12 A320s, and four 737s have been transferred from Virgin Australia since 2016. Despite the transition, Tigerair’s passenger demand and yields have been relatively strong, and the LCC is demonstrating “good fundamentals going forward,” Borghetti said.

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