Sun, Apr 04, 2010
Australian Discount Airline To Buy Up To 105 New Boeing
737's
Virgin Blue Group confirms it has formally signed an agreement
with aircraft manufacturer Boeing for up to 105 brand new 737
aircraft.
This consummates the in-principle agreement, which was signalled
at the recent half year financial results briefing. The transaction
has been in negotiation for nine months and its completion
constitutes the biggest aircraft order in Virgin Blue's ten year
history and the Boeing Aircraft Company's largest order in the past
18 months.
The agreement includes 50 firm B737-800NG aircraft (with
flexibility to convert to either B737-700 or B737-900), 25
additional firm delivery positions secured as options and 30 future
purchase rights. Delivery is scheduled from June 2011 through to
2017 and delivery options negotiated will provide important
flexibility to manage movements in market conditions, to
aggressively ensure market share is not eroded and to provide
additional growth options at Virgin Blue's discretion.
A significant percentage of the aircraft is intended for
replacement of the existing narrow body fleet, while the remainder
will be deployed to new routes and to boost frequency where demand
dictates.
Virgin Blue Chief Executive, Brett Godfrey, said, "Securing this
agreement now places Virgin Blue in a strong position to prepare
for steady future growth as domestic and short haul markets
recover. It will also ensure a turnover of aircraft to maintain the
youngest fleet of modern aircraft which is crucial for maintaining
our commitment to on-time performance and the lowest cost base
possible."
The new aircraft order will deliver a further reduction in
operating costs to manage the airline's future cost base, maximize
reliability and continue to bring to market modern airline products
and services. The deal includes aircraft with the latest technology
under the Boeing Performance Improvement Plan, which will also help
the carrier maintain its commitment to reducing its carbon
footprint, via initiatives including engine improvement and
enhanced aerodynamics. The aircraft will be delivered with Boeing's
new sky interiors with inclusions such as newly designed seats and
IFE which will complement Virgin Blue's 'Airline of the Future'
initiative to be rolled out during 2011.
Brett Godfrey added, "Virgin Blue was fortunate to see the
opportunity and be in a position to take advantage, of the downturn
in the market as we did back in 2001, to secure long term future
supply of aircraft on attractive commercial terms. Pricing cannot
be disclosed but importantly net pricing is improved from 2001
levels, allowing for a lowering of the fleet's cost base. We expect
to finalize our funding arrangements for these aircraft
shortly."
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