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Virgin Australia: Boeing deal for 25 x 737 MAX jets in 2023

Virgin Australia: Boeing deal for 25 x 737 MAX jets in 2023

Virgin Australia (VA) has re-negotiated its deal with Boeing which will see 25 of the narrow-bodied planes added to its fleet in mid 2023. This gives us an insight into how Virgin Australia sees itself expanding, with more than 80 jets in the air in the next 3 years, and the capability of flying international short-haul routes.

The 737 MAX is returning to the air after receiving approval from the American Federal Aviation Authority a year after it was suspended from flying due to two tragic crashes in 2018 and 2019 resulting in the deaths of 346 people.

This move will make Virgin Australia one of the first airlines in the world to recertify their order after that grounding.

Background

VA originally would have received 25 of these 737 MAX 10’s in July 2021 with another 23 of the ‘8’ version of the plane arriving in February 2025. The previous VA CEO, Paul Scarrah deferred that order after the crashes and subsequent grounding of the aircraft.

This order change means that Virgin Australia will no longer be receiving any 737 MAX 8’s.

“We have already moved to simplify our mainline fleet and committed to the Boeing 737 aircraft as the backbone of our future domestic and short-haul international operations.

“The MAX 10 will allow us to build on the operational flexibility we have been able to achieve with our existing fleet throughout (the) administration to ensure we remain competitive on the other side of COVID-19.”

Jayne Hrdlicka, Virgin Australia Group CEO and Managing Director (That’s a mouthful of a title!)

The future

This order means that all of the Virgin Australia fleet will be from the one family of aircraft and the one manufacturer. That should create some efficiencies to lower the cost base of the airline.

“We have already moved to simplify our mainline fleet and committed to the Boeing 737 aircraft as the backbone of our future domestic and short-haul international operations.”

Jayne Hrdlicka, Virgin Australia Group CEO and Managing Director

The statement indicates that Virgin Australia still has international flying ambitions:

“These enhancements will give us the ability to manage demand and deploy the B737 MAX 10 on high-density domestic and short-haul international routes or where there are constraints due to slot availability limitations.

Jayne Hrdlicka, Virgin Australia Group CEO and Managing Director

Safety

Of course, the big question is about the safety of this aircraft. A lot of time and money has been spent on correcting the software and some electronic detector faults. The fact remains that this plane is made of new materials with new, more powerful engines stuck on an airframe designed a long, long time ago. Some engineers see this as the essential problem with the aircraft and not just the software that attempted to get around this issue, however much it has been improved.

The statement recognises this with the following words from the Group CEO and Managing Director:

“We will also continue to invest in capability that delivers a safe and efficient aircraft operation, and one that ensures safety remains our top priority. With support from Boeing, any new aircraft will undergo careful evaluation to ensure we are comfortable with it prior to entering service.”

2PAXfly Takeout

This is a tricky route for Virgin Australia to choose – as tricky as it is for any airline choosing to go with the MAX aircraft.

MAX buyers have made a careful calculation that there will be no future problems with the aircraft that could affect passenger confidence. That’s a bold call in my opinion and one influenced by both the efficiency of the 737 MAX and the price incentives Boeing has doubtless offered to purchasers, given it has hundreds of the aircraft grounded and an unenviable collection of cancelled or suspended orders.

Next up – will Qantas order the MAX? That’s a story still to be told.

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