Virgin Australia announces restructure of Boeing 737 MAX order

Sydney, Australia, November 8, 2014 a Boeing 737-800 in Virgin Australia colour scheme taking off from Sydney (Kingsford Smith) Airport on a late afternoon. The plane is bound for Gold coast Queensland

By Christian Fleetwood

Virgin Australia will restructure its Boeing 737 MAX aircraft deliveries after reaching an agreement with the manufacturer.

In a statement released this morning, Virgin Australia has announced it will defer the delivery of its first round of Boeing MAX aircraft from 2019 to 2021.

The airline has also reported it will convert 15 of its 737 MAX 8 aircraft to 737 MAX 10s.

Virgin Australia’s original order had been for 10 737 MAX 10 aircraft (scheduled for January 2022) and 38 737 MAX 8 aircraft (scheduled for November 2019).

Following its new restructured order, Virgin Australia will now receive 25 737 MAX 10s and 23 737 MAX 8s. Virgin Australia will take delivery of its first 737 MAX 10 aircraft in 2021 with its first 737 MAX 8s scheduled to arrive in 2025.

Virgin Australia said the restructuring of its deal with Boeing results in a “significant deferral of capital expenditure” and that the agreement will provide “access to the superior economic benefits of the MAX 10 aircraft”.

“I’m pleased that we have reached an agreement with Boeing to convert a further 15 of our Boeing 737 MAX 8 aircraft to MAX 10s and defer delivery of our order to July 2021,” Virgin Australia group CEO and managing director Paul Scurrah said.

“The revised timing also results in a number of positive commercial benefits for the group.

“This includes a significant deferral of capital expenditure by extending the use of existing aircraft, given the relatively young age of our fleet, along with providing the group earlier access to the superior operational economics of the MAX 10 aircraft.”

Scurrah also said the airline was confident in Boeing’s commitment to returning the 737 MAX to service safely.

“[A]s a long-term partner of Boeing, we will be working with them through this process,” he said.

The news comes amid an international grounding of Boeing’s 737 MAX 8 aircraft, following the fatal Lion Air flight 610 and Ethiopian Airlines flight 302 disasters.

Boeing is currently working on its MCAS software update, which the company says will fix the system that has been implicated in both crashes.

Boeing CEO and president Dennis Muilenburg said that, following its upcoming MCAS updates and pilot training, the 737 MAX 8 will be “among the safest airplanes ever to fly”.

The aircraft manufacturer has said that it is close to completion on its update.

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