32 Firm Orders, 64 Options
Boeing and Air Canada Monday
unveiled their agreement to renew the airline's wide-body fleet
with up to 36 Boeing 777s and up to 60 Boeing 787 Dreamliners. Air
Canada will use the airplanes to modernize its existing fleet and
improve operating efficiencies.
The agreement includes firm orders for 18 777s, plus purchase
rights for 18 more, in a yet-to-be-determined mix of the newest 777
models: the 777-300ER, the 777-200LR Worldliner (the longest range
airplane in the world), and the 777 Freighter. Deliveries of the
777s begin next year.
The agreement also includes firm orders for 14 787s, a mix of
787-8s and 787-9s, plus options and purchase rights for an
additional 46 airplanes. Air Canada's first 787 will be delivered
The firm orders are valued at approximately $6 billion at list
prices. The order is subject to several conditions including final
documentation. The companies expect to finalize the agreement by
"Our decision to modernize our fleet with the 777 and 787
Dreamliner will move Air Canada into a clear leadership position
among North American international carriers with the world's two
newest and most efficient twin-engine, long-haul airplanes," said
Robert Milton, president and chief executive officer of ACE
Aviation Holdings, Inc., the parent company of Air Canada. "The
superior customer comfort and operating economics of these aircraft
will put us in the company of the leading European, Middle East and
Asia Pacific carriers."
The 777 and 787 are uniquely suited to meet Air Canada's current
route structure and growth plans, which include long-range,
non-stop routes for both passengers and cargo, with an increasing
emphasis on growing markets in Latin America and China.
"Our analysis of these aircraft
pointed to overwhelmingly attractive economics. We have estimated
the fuel burn and maintenance cost savings alone on the 787 to be
approximately 30 percent versus the 767s they will replace," said
Milton. "Particularly important in the current high fuel price
environment are that the savings on these two line items alone will
be more than twice incremental ownership costs in acquiring these
Operating in the same fleet, the 777 and 787 will allow Air
Canada to tailor capacity to seasonal demand with two aircraft
types that fly the same speed and range yet offer different seating
"We are proud to be a part of Air Canada's plans for future
growth and look forward to supporting the airline fully as it
begins to incorporate our 777s and 787s into its fleet," said
Boeing Commercial Airplanes President and CEO Alan Mulally.
Montreal-based Air Canada said last week its strategy for
passenger service includes enhanced daily non-stop flights between
Toronto and Beijing by 2006, and Toronto and Shanghai flights by
the middle of next year. It will start Vancouver to Guangzhou
service in the summer of 2007.
For cargo operations, Air Canada will begin offering Toronto to
Shanghai service next month and boost that cargo service on daily
routes next year. Canada's flag carrier also expects to start
Toronto to Guangzhou cargo service in 2007 and eventually plans to
add Tianjin to its freight operations.
"The timing of Air Canada's decision is critical for locking in
rapidly disappearing early delivery positions for the 787, which is
essentially sold out through 2010," said Mulally. "Air Canada also
has secured three of the very few remaining near-term delivery
slots for the 777."
Air Canada is the 18th airline to select the 787 Dreamliner,
bringing the total number of announced firm orders and commitments
to 217. Air Canada joins a growing team of 787 launch customers
who've recognized the 787's exceptional value and superior