
Air Canada officials announced Dec. 11, 2013, that the airline’s mainline narrowbody fleet renewal plan 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% will generate an estimated CASM reduction of approximately 10% 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 6 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 Sept. 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.
About the Boeing 737 MAX
The Boeing 737 MAX brings advanced engine technologies to build on the strengths of the Next-Generation 737. The 737 MAX incorporates the latest-technology CFM International LEAP-1B engines to deliver high efficiency, reliability and passenger comfort in the single-aisle market. According to Boeing, airlines operating the 737 MAX will see a 14% fuel-use improvement over today's most fuel-efficient single-aisle airplanes.
About Air Canada
Air Canada is Canada's largest domestic and international airline serving more than 175 destinations on five continents. Canada's flag carrier is among the 20 largest airlines in the world and in 2012 served close to 35 million customers. Air Canada provides scheduled passenger service directly to 60 Canadian cities, 49 destinations in the United States and 67 cities in Europe, the Middle East, Asia, Australia, the Caribbean, Mexico, and South America. Air Canada is a founding member of Star Alliance, the world's most comprehensive air transportation network serving 1,328 destinations in 195 countries and is the only international network carrier in North America to receive a Four-Star ranking according to independent U.K. research firm Skytrax that ranked Air Canada in a worldwide survey of more than 18 million airline passengers as Best Airline in North America in 2013 for the fourth consecutive year.
Boeing officials later on Wednesday issued a statement that they were pleased with the Air Canada announcement.
"We're honored that Air Canada chose Boeing to lead its fleet renewal plan," said Brad McMullen, vice president of North America Sales, Boeing Commercial Airplanes. "We know the 737 MAX will provide the airline and its customers with an experience that can't be matched."
When finalized, the firm order for 61 737 MAX 8s and MAX 9s is expected to be worth $6.5 billion at list prices and will be posted to the Boeing Orders & Deliveries website.
Sources: Air Canada, Boeing
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