Wednesday, December 11, 2013

Global Impact: Order from Boeing Promises to Give Air Canada One of the World's Youngest Fleets

According to AFP, Air Canada announced it has placed a firm $6.5 billion order for 61 Boeing 737 MAX narrow-body aircraft, with options on 18 more planes and purchase rights for 30 others.

The order, which comes as the airline seeks to replace its aging Airbus A320 and A321 fleet, concerns 33 of the MAX 8 version of the 737, and 28 of the MAX 9 aircraft with substitution rights between them, as well as for 737 MAX 7 aircraft.

Canada's largest carrier said it was also weighing replacing 25 of its Embraer E190 fleet with other aircraft that can seat 100 to 150 people.

Deliveries for the Boeing order are due to begin with two aircraft in 2017, with 16 the following year, 18 in 2019, 16 in 2020 and nine in 2021.

Air Canada said the move would create "one of the world's youngest, most fuel-efficient and simplified airline fleets."

COMMENT: "Our narrow-body fleet renewal program is expected to yield significant cost savings," Air Canada's president and chief executive Calin Rovinescu said in a statement.

The airline estimated that the purchase would generate a 10% reduction in cost per available seat miles compared to its existing narrow-body fleet.

Air Canada, based in Saint-Laurent, Quebec, plans to grow its fleet from 192 aircraft to about 214 by the end of 2019. 

The airline said it has thirteen options and rights to purchase ten Boeing 787 aircraft, rights to purchase thirteen Boeing 777 aircraft, in addition to the 18 options and 30 purchase rights for Boeing MAX aircraft.

With the firm order for 61 jets, Boeing has not only caught up with Airbus, it has won an important customer in North America.

With the order from Air Canada, and the 200 B777s for Emirates and Qatar Airways, Boeing has now rung up 1,274 units on order for the year.

In terms of deliveries, the US aviation giant remains in the lead with 580 planes delivered to clients in the first 11 months of the year. European rival Airbus is at 562 units for 90 clients.

"We're honored that Air Canada chose Boeing to lead its fleet renewal plan," said Brad McMullen, vice president of North America sales for Boeing Commercial Airplanes.

Last month, Boeing announced up to $101.5 billion in aircraft orders at the Dubai Air Show, as its new 777X model propelled total demand to more than twice that booked by Airbus.

Boeing claims that the aircraft, which is to enter service around 2020, would be 12% more fuel efficient than the Airbus A350.

Air Canada, the flag carrier and largest airline of Canada, was founded in 1936. Among the world's 20 largest airlines, it serves more than 175 destinations.