AC to Purchase A320/Boeing 737 MAXs

Discussion in 'Air Canada | Aeroplan' started by milchap, Dec 3, 2013.  |  Print Topic

  1. milchap
    Original Member

    milchap Gold Member

    Messages:
    27,668
    Likes Received:
    148,098
    Status Points:
    20,020
  2. The Lev
    Original Member

    The Lev Silver Member

    Messages:
    398
    Likes Received:
    376
    Status Points:
    545
    I wonder if the other shoe - order for CSeries - will be done at the same time or if AC is playing hardball with BBD.
     
    jbcarioca and milchap like this.
  3. 2by4

    2by4 Silver Member

    Messages:
    44
    Likes Received:
    40
    Status Points:
    165
    .... or why has Bombardier just fired their VP Sales today? Maybe because they did not get the AC order?
     
    jbcarioca likes this.
  4. milchap
    Original Member

    milchap Gold Member

    Messages:
    27,668
    Likes Received:
    148,098
    Status Points:
    20,020
    Good question.
     
    YULtide and jbcarioca like this.
  5. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
    They'll need to replace not only the E190s but also the A319s and the (AC Regional) E175s. Based on this news item the A319 neo is not going to happen (not a big surprise, it has not been a strong seller) so it's either Cseries or Embraer's E2 series. The E2 won't be available until about 2020 though, even if there are no delays, and it can't really replace the A319.

    Given the recent YTZ developments, there could be 30 early slots available for the Cseries ...
     
    YULtide and milchap like this.
  6. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
    The most plausible speculation (and all we have is speculation) is that he was dismissed because of disappointing CRJ and Q400 sales, not because of Cseries.
     
    YULtide and LETTERBOY like this.
  7. LETTERBOY
    Original Member

    LETTERBOY Gold Member

    Messages:
    1,650
    Likes Received:
    2,522
    Status Points:
    1,425
    Any company that would fire someone because they didn't get one order has a few screws loose.
     
  8. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
  9. tcook052
    Original Member

    tcook052 Silver Member

    Messages:
    518
    Likes Received:
    637
    Status Points:
    695
    No longer a rumour:

    http://aircanada.mediaroom.com/index.php?s=43&item=727

    MONTREAL, Dec. 11, 2013 /CNW Telbec/ - Air Canada today announced its mainline narrowbody fleet renewal plan that includes commitments, options and rights to purchase up to 109 Boeing 737 MAX aircraft. The new aircraft will replace Air Canada's existing mainline fleet of Airbus narrowbody aircraft, creating one of the world's youngest, most fuel efficient and simplified airline fleets.
    The agreement with Boeing, which is subject to completion of final documentation and other conditions,includes firm orders for 33 737 MAX 8 and 28 737 MAX 9 aircraft with substitution rights between them as well as for the 737 MAX 7 aircraft. It also provides for options for 18 aircraft and rights to purchase an additional 30. Deliveries are scheduled to begin in 2017 with 2 aircraft, 16 aircraft in 2018, 18 aircraft in 2019, 16 aircraft in 2020 and 9 aircraft in 2021, subject to deferral and acceleration rights.

    "We are pleased to announce our agreement with Boeing for the purchase of 737 MAX aircraft as part of the ongoing modernization of Air Canada's fleet," said Calin Rovinescu, President and CEO of Air Canada. "Renewal of our North American narrowbody fleet with more fuel efficient aircraft is a key element of our ongoing cost transformation program and the enhanced passenger cabin comfort provided by the Boeing MAX will help us to retain Air Canada's competitive position as the Best Airline in North America. Our narrowbody fleet renewal program is expected to yield significant cost savings. We have estimated that the projected fuel burn and maintenance cost savings on a per seat basis of greater than 20 per cent will generate an estimated CASM reduction of approximately 10 per cent as compared to our existing narrowbody fleet."

    Air Canada continues to evaluate the potential replacement of its Embraer E190 fleet with more cost efficient, larger narrowbody aircraft that are better suited to its current and future network strategy. Consistent with this strategy, the agreement with Boeing provides for Boeing to purchase up to 20 of the 45 Embraer E190 aircraft currently in Air Canada's fleet. The E190 aircraft exiting the fleet will be initially replaced with larger narrowbody leased aircraft until the airline takes delivery of the Boeing 737 MAX aircraft. The company will be reviewing various options over the next six months for the remaining 25 Embraer E190 aircraft including continuing to operate them or replacing them with a yet to be determined number of aircraft in the 100 to 150 seat range.

    Air Canada's plan is for its total fleet including Air Canada rouge™, excluding aircraft flown by its contracted regional carriers, to grow from 192 aircraft as at September 30, 2013 to approximately 214 by the end of 2019, on a pro forma basis. Additionally, for further growth flexibility, Air Canada has 13 options and rights to purchase 10 Boeing 787 aircraft, rights to purchase 13 Boeing 777 aircraft as well as the 18 options and 30 purchase rights for Boeing MAX aircraft.

     
    Last edited: Dec 11, 2013
  10. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
    738 and 739 only, so no replacement for the A319s yet, either. I expect AC was able to negotiate a sweet deal from Boeing to switch from the A320. Boeing is fighting hard to get to 50% narrowbody marketshare -- and AC would need justification for having to re-train the pilots and operate a mixed fleet during the transition period.

    It'll be new aircraft, but I don't know that I'd call narrower seats (and probably tighter seat pitch) "enhanced passenger comfort"! But maybe they'll at least have a functional IFE system ...
     
  11. YULtide

    YULtide Gold Member

    Messages:
    2,746
    Likes Received:
    10,555
    Status Points:
    10,520
    Hmmm... more fuel efficient aircraft will surely bring lower fuel surcharges.
     
    canucklehead likes this.
  12. milchap
    Original Member

    milchap Gold Member

    Messages:
    27,668
    Likes Received:
    148,098
    Status Points:
    20,020
    My FT name is airbus 320.....I am in mourning. :(
     
  13. Wandering Aramean
    Original Member

    Wandering Aramean Gold Member

    Messages:
    28,220
    Likes Received:
    61,766
    Status Points:
    20,020
    :confused:

    Why would the A319s not be replaced as part of this deal?

    I'm also a bit surprised to see that E90s will be removed from the fleet.
     
  14. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
    AC only ordered MAX 8 and MAX 9, which more or less are equivalent to the A320 and A321. So far Boeing has 1700 firm orders for the MAX, but only about 3% of those are for the MAX 7, where the economics are not as good as for the 8 and 9. The rumours are that Boeing will delay or even drop the 7 if it doesn't find substantial customers for it. (The situation is very similar for the Airbus A319 neo.)

    AC will make the 100-150 seat decision separately. A lot of the A319s are moving to Rouge, the rest, plus the Embraers, are an open question.
     
    gregm, canucklehead and YULtide like this.
  15. Cage
    Original Member

    Cage Silver Member

    Messages:
    67
    Likes Received:
    53
    Status Points:
    270
    The 319s are at most 15 years old while the 320s are over 20 years old. There is not the imperative to replace 319s from an end of life perspective.

    Many of the routes that AC Rouge is taking over are current 320 or 319 airplanes. Take YYC-LAS as an example, it currently AC mainline 320 but will likely be transferred next year to Rouge 319. The freed up 320 will take the place of 319 that currently flies YYZ-YYC.

    Maintenance and operational challenges aside, the main problem with E90s is they are not great transcontinental aircraft and have the worst Business Class product at AC. About the only thing good for E90s is best in class economy cabin, so the E90s have a certain way of reducing premium fare market. Why would I buy up to Flex fare level just to upgrade from Best economy seat to worst Business seat.

    Additionally the E90s had horrible small cargo cabins that made transporting transcontinental bag requirements (more checked bags and each piece is larger) a big challenge.

    Departure of 20 E90s will allow for the transcontinental product to be uniform single aisle Airbus (initially ahead of the introduction of 737max) and switching to Single aisle Boeing in 2018. The E90 sweet spot is short haul mainline flying under 1.5 hours.
     
    gregm, canucklehead and mevlannen like this.
  16. tcook052
    Original Member

    tcook052 Silver Member

    Messages:
    518
    Likes Received:
    637
    Status Points:
    695
    That thought came to mind recently when I saw them flying the GCM-YYZ route.
     
    canucklehead likes this.
  17. mevlannen
    Original Member

    mevlannen Silver Member

    Messages:
    710
    Likes Received:
    1,468
    Status Points:
    870
    Quite agree with your analysis. E90 (and for that matter) the 320/321s, all make for dreadful experiences in J-class when travelling on a red-eye segment. Not that the day's all that much better, with the cramped J seating.

    Y'know, it does seem that transcontinental pod flights have quite ruined me for any other alternatives!
     
    canucklehead and YULtide like this.
  18. gregm

    gregm Gold Member

    Messages:
    1,508
    Likes Received:
    2,161
    Status Points:
    1,200
    This actually surprised me in a good way. I really thought they would go with Airbus.

    TORONTO, April 1 (Reuters) - Air Canada, Canada's largest airline, finalized its order for 61 Boeing Co 737 Max single-aisle jets, the companies said on Tuesday, completing the first phase of the carrier's narrow-body fleet renewal plan.

    The order for the 737 MAX planes, valued at $6.5 billion at list prices, was first announced in December and is a major win for the U.S. aircraft maker. It also marks a significant supplier shift for the Montreal-based airline.


    Read the entire article: http://finance.yahoo.com/news/air-canada-finalizes-order-boeing-150837286.html
     
  19. blackjack-21

    blackjack-21 Gold Member

    Messages:
    1,437
    Likes Received:
    3,000
    Status Points:
    1,910
    I don't think they were really too happy with their A330/340's over the years, and the A320's are starting to get long in the tooth, with some A319's and B767's being "rouged", so looking at their recent orders (B777-300's, B787's) it looks like they may eventually be thinking of an all Boeing main line fleet.
     
    gregm and canucklehead like this.
  20. foxberg

    foxberg Gold Member

    Messages:
    1,196
    Likes Received:
    2,430
    Status Points:
    1,245
    Or more profit to AC.
     
  21. canucklehead
    Original Member

    canucklehead Gold Member

    Messages:
    5,895
    Likes Received:
    22,059
    Status Points:
    11,070
    737 Max, as in Maximum seating! :p

    Bombardier still looks like it is in the running to replace the remaining 25 E90s which have only been around since 2006-2008 (two delivered in 2005). Aside from the 777s and 787s, it is ACs most recent fleet entries.
     
    gregm, YULtide and blackjack-21 like this.
  22. blackjack-21

    blackjack-21 Gold Member

    Messages:
    1,437
    Likes Received:
    3,000
    Status Points:
    1,910
    But the C-Series jet from Bombardier seems to be slow getting certified, so they better hurry or they'll lose out to someone else.
     
    gregm likes this.
  23. The Lev
    Original Member

    The Lev Silver Member

    Messages:
    398
    Likes Received:
    376
    Status Points:
    545
    Even with delays, who will be out with a new plane in the CSeries category any time remotely close to BBD?
     
    gregm likes this.
  24. blackjack-21

    blackjack-21 Gold Member

    Messages:
    1,437
    Likes Received:
    3,000
    Status Points:
    1,910
    Without checking any of the Chinese, Japanese, Embraer or other aircraft manufacturers, I don't know WHO specifically, but do you really think all of the others are sitting on their hands awaiting the deliveries of the new CSeries jets and not developing any competing aircraft of their own? Aren't both the Chinese and Russians also in the development and testing stages of their similar sized aircraft?
     
    Last edited: Apr 8, 2014
    canucklehead likes this.
  25. canucklehead
    Original Member

    canucklehead Gold Member

    Messages:
    5,895
    Likes Received:
    22,059
    Status Points:
    11,070
    I am not positive, but I think the Comac ARJ21, Sukhoi Superjet (both built and flying) are <100 seaters, along with the Mitsubishi Regional Jet (to fly this year and into production next year). The first two have had around 300 planes orders but mostly for their home markets. If anything they are more competitors of the CR7 and ER75/90s with stretch versions having >100 seat capacity only with single class configurations. There may be others in development, but these come to the top of my head for (near) production ready models.

    Embraer does have a sizable RJ market, but not sure if AC is considering them considering they jettisoned (pun intended) their fairly young fleet of ERs.
     
    YULtide and blackjack-21 like this.

Share This Page