Today, Air Canada, in a surprising move, has decided to replace their current Airbus narrowbody fleet with the offering from the competition – the Boeing 737 MAX.
They have ordered a total of 61 of the aircraft, with 33 going to the MAX 8 and 23 to the larger MAX 9. The “up to 109” part of the transaction comes from 30 purchase rights and 18 options. At list prices, the firm orders would be a transaction of over six billion dollars, but you better believe that the airline made a stellar deal for the planes.
“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.”
By 2019, Air Canada plans to have an all Boeing long-haul fleet, and a majority Boeing short-to-medium haul fleet. Currently, the airline operates a fleet of 27 Airbus A319s, 36 A320s and 10 A321s.
The Boeing 737 NextGen order book continued to bulge, growing virtually unabated even through the deep worldwide economic slowdown / crisis of 2008-12. Ironically, this era of financial strife and sharply escalating fuel costs, as well as the growth of emerging markets, helped 737 and A320 sales go from strength to strength. Boeing however didn’t stand on it its laurels or did it?
Boeing claims with the introduction of its latest performance improvement package “PIP”, today’s NGs are 6-7 more efficient then when they were first introduced in the late 1990s. Boeing’s Tinseth points out that “The (737) program has taken off with record sales. It’s simple. We make it better every time. We were first in its class with ETOPS 180, glass cockpits, Sky Interiors, and high bypass engines. We lower the operating costs through such new technologies as blended winglets, heads up display, carbon brakes, and more fuel-efficient engines. We enhance customer appeal with the new Sky Interior. This is an airplane that appeals to the heart of the market: emerging and developing economies and it is very successful with the LCC business model”. These new LCC airlines in emerging markets include Lion Air, Air Asia, and Gol! An unintended benefit of the weak economy, particularly in the U.S., is the poor financial results led to an elderly, fuel-in-efficient, maintenance intensive fleet which created an advantage and some say a bubble for airframe manufacturers, particularly in this sweet smart of the market. “The significant driver in the US is the demand to replace older and less efficient aircraft”, said Tinseth.
Photo of Paine Field taken just a few days ago. Many Boeing planes might have been delivered in 2012, but there are still many parked at KPAE. BTW, looking at this photo you have brand new Boeing planes and Mount Rainier in the background. I love living in Seattle.
Boeing had a pretty darn good 2012. They received 1,203 net commercial orders and had 601 deliveries. One of the best successes for Boeing was the 737 and the new more efficient MAX model (still not keen on that name).
Of the 1,203 net orders in 2012, 1,124 of those were for the 737 and 914 of those were for the MAX. Not to mention that the 737 celebrated its 10,000th order earlier in 2012.
Boeing orders and deliveries for 2012. Chart from Boeing.
Boeing President & CEO Ray Conner sent a letter to all Boeing Commercial Airplanes employees to recognize their ‘incredible’ contributions to the company’s success in 2012. I figured it was something worth sharing:
As we kick off a new year, I’d like to recognize your incredible accomplishments in 2012. You’ve demonstrated through your hard work and dedication that you are the best aerospace team in the world.
Thanks to your efforts, we ended the year with 1,203 net orders – the second-largest total in company history. We delivered 601 airplanes – the most since 1999 – and we continued to raise the bar across all programs. We also advanced our services strategy and increased the breadth of our offerings to customers.
On the 737 program, we booked 1,124 net orders – unprecedented for any of our models in a single year – and celebrated the program’s 10,000th order. The Next-Generation 737 set a record for deliveries – 415 in the span of a year. And the 737 MAX logged 914 net orders, pushing us past the 1,000 order mark.
Our strong performance extended to the twin-aisle programs as well. The 787 program closed out the year with 46 deliveries – including 11 Dreamliners in December alone. In all, we have delivered 49 787s to eight customers. The 777 program made a milestone 1,000th delivery, the 747-8 Intercontinental and Freighter continued to receive positive reviews for performance from customers, and the 767 team helped the KC-46 Tanker program meet or surpass its development milestones for the year.
Not only that, in December we delivered 15 airplanes in a 24-hour period from Everett, Renton and Charleston combined – the most in one day since 1998 – highlighting our collective strength as one team. We achieved all this while stepping up production 26 percent over the course of several rate increases throughout the year. This is outstanding work by an amazing team and I know our customers appreciate it.
Looking forward, our customers continue to face an increasingly tough business environment, making it more important than ever that they acquire more-efficient products and services at lower costs. To help meet demand, we’ll continue to focus on raising production rates and continuously improve how we build airplanes. We’ll transition the 787-9 into production and flight test and continue working toward the 787-10X and the 777X, guided by the needs of our customers.
On our development programs, we will be more disciplined as we implement lessons learned from the past. We’ll think early in the process about how we can better support our customers throughout the product lifecycle, while ensuring our own profitability.
With a backlog of 4,373 unfilled orders – the highest in our history – we have huge opportunity ahead of us if we execute on our commitments. We know we have the right products and we’ve proven we know how to increase rates. I know we have the right team to make it possible.
It takes our entire team to be successful – everyone is an important player. That means we need to look out for one another and be relentless about achieving our goal for a safe work environment with zero injuries. It also means having a culture where we treat our teammates with the highest level of integrity and respect. As we all sign Boeing’s Code of Conduct this month, we should think about the kind of culture we want to have – one that makes us proud to work here. Let’s make it happen.
Once again, I’d like to thank you for making last year so successful. I look forward to the year ahead.
This story written by…David Parker Brown, Editor & Founder.
David started AirlineReporter.com in the summer of 2008, but has had a passion for aviation since he was a kid. Born and raised in the Seattle area (where he is currently based) has surely had an influence and he couldn’t imagine living anywhere else in the world.
What United’s Boeing 737 MAX 9 will look like. Image from United.
Today in a joint press conference in Chicago, United Airlines has announced that they will order 100 Boeing 737 MAX 9 and 50 737-900ERs. The order is worth $14.7 billion.
“This order is a major step in building the world’s leading airline, and we look forward to offering our customers the modern features and reliability of new Boeing airplanes, while also making our fleet more fuel efficient and environmentally friendly,” said Jeff Smisek, United’s President and CEO. “New aircraft deliveries support our flexible fleet plan, permitting us to tailor future capacity up or down, based on changes in demand or other market conditions.”
This order is huge. Although United got rid of its last Boeing 737 before the recent merger with Continental, the new (post-merger) United has a large fleet of both Boeing 737s and Airbus A320s. The fact that they have operated both aircraft and have chosen the 737. United stated that they had intensive discussions with both Boeing and Airbus about which aircraft to go with and chose to go with the 737.
Since July 5th, Boeing has received 243 orders for the 737 MAX and NG (Next Generation), not counting the new order announced today. Over all, Boeing has more than 1200 orders and commitments from 18 customers for the MAX.
VIDEO: B-roll material of the United Airlines Boeing 737 MAX 9
GALLERY: United Airlines Boeing 737-900ER and 737 MAX 9