Boeing scored a major deal last week, with the
announcment of Virgin Blue's decision to purchase up to 50
additional new Boeing 737 airplanes. The agreement includes a firm
order for 10 737-800s and options for 40 more 737s, with an
estimated list value of $3 billion. The decision follows extensive
evaluation of the 737 and its closest competitor, the Airbus A320.
The new 737s will meet Virgin Blue's fleet expansion plans for the
next 10 years, with deliveries scheduled to begin this August.
The airplanes were recently accounted for in Boeing's published
order totals, attributed to an unidentified customer.
"We started this process with a clean sheet of
paper to ensure we achieved the best possible result," said Brett
Godfrey, chief executive officer of Brisbane-based Virgin Blue. "At
the end of the day, the 737 aircraft produced the best results for
Virgin Blue, and more importantly our guests. The 737 is the proven
leader for low-fare airlines around the world, and it has been
crucial to the success of Virgin Blue. We did a very thorough
analysis, and Boeing was first past the post."
The new airplanes will have performance-enhancing winglets
manufactured by Hawker de Havilland, an aerospace manufacturing
supplier based in Melbourne, Australia. Virgin Blue began providing
Australian domestic service August 31, 2000, and has carved a niche
in the low-cost market. The Brisbane-based carrier is Australia's
largest low-fare airline, operating an all-Boeing fleet that
includes 28 Next-Generation 737s and one Classic 737. The airline
also has announced its interest in flying to regional destinations
including New Zealand and several South Pacific islands.
"After its rigorous examination, Virgin Blue's decision
reaffirms the 737 as the best solution for low-fare airlines," said
Doug Groseclose, vice president International Sales, Boeing
Commercial Airplanes. "One model, one pilot group, and one
engineering philosophy all add up to a great recipe for success.
Low-cost carriers are driving the airline business globally, and
it's no secret that the 737 is the leading airplane for this
growing segment of the market."
The low-fare business models of Southwest Airlines and Ryanair
replicated around the world are based on an all-Boeing 737 fleet.
There are more than 900 737s in service or on order for the
low-fare market. "Having a new fleet of 737s has been one of the
key components of customer acceptance of a maverick airline in what
was a stagnant domestic aviation market," Godfrey added. "Our
guests appreciate the smooth ride and comfortable cabin environment
while our operations team found that its efficient design
facilitated our quick turnarounds and consistent on-time
Next-Generation 737s have the lowest operating costs in their
class -- almost 4 percent lower on a typical route than the closest
competitor. The maintenance costs of the 737 are up to 35% lower,
and the 737 is the industry leader in reliability. The 737
single-aisle airplane also is quicker to load and unload, which
allows carriers to make maximum use of their airplane.
Virgin Blue employs more than 2,200 people.