Virgin Blue Orders Nine Boeing Jets Worth $634.5 Million

[Yada Yada]

Virgin Blue Orders Nine Boeing Jets Worth $634.5 Million

June 13 (Bloomberg)

-- Virgin Blue Holdings Ltd., Australia's second-biggest airline, agreed to buy nine Boeing Co. jets valued at $634.5 million as it expands its fleet of younger, more fuel- efficient aircraft.

The order is for nine 737-800 airplanes with delivery to start in 2008, Chicago-based Boeing said in a PR Newswire statement today. Boeing had previously announced the order without identifying Brisbane-base Virgin Blue as the buyer.

Virgin Blue, whose fuel costs account for 23 percent of revenue, wants newer planes to lower costs. The company spent A$212 million ($158 million) on fuel in the first-half ended March 31, almost a third more than in the first half a year earlier.



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I was hoping to read that they'd ordered some wide body jets. :-|

Some of these are to replace existing equipment that is under lease.

 

[jakeseven7]

So are they actually adding to their fleet or just replacing?

Im not a big fan of the 73H's on any airline.

 

[Yada Yada]

So are they actually adding to their fleet or just replacing?

Im not a big fan of the 73H's on any airline.

The reports are slightly contradictory. Bloomberg refers to it as an expansion of the fleet with some being used to replace leased equipment, whereas the Boeing website press release says that they are simply replacements for leased planes in the fleet.

 

[NM]

Its interesting that the media reports mentions fuel efficiency as being the driving factor behind the decision. But DJ already has a fully 737NG fleet (737-700 and 737-800), so I assume these new aircraft will be just as fuel efficient as the others in the fleet.

It would seem fleet ownership is more of the drive behind this order rather than fuel costs. Its good to see that DJ are in a financial position to exercise this fleet ownership option.

 

[Mal]

Are they replacing the 73G's with 73H's perhaps?

DJ has a few "Ugly Ducklings", including one aircraft with a bulkhead in front of 1ABC and different seats. They might be the ones to go.

Time will tell, I suppose.

 

[Standby]

DJ seem to understand that growth for growth's sake with fuel at +USD70 per barrel won't delver a great outcome for the new shareholder.
On key routes they have ample frequency and product upgrades either announced or implemented to get some yield upside and leisure flyers have a middle ground carrier not as cheap and nasty as JQ but cheaper than JQ's big brother to choose from who offer a connecting product from Hobart to Cairns.
Until they can get those yields up there won't be any major Dom expansion like the 20-50% growth we've seen in recent years.
Upgrading aircraft saves costly MTCE (saves sending them offshore to get any work done which is very un Ostralian )