With airlines around the world delaying the delivery of new aircraft in order to conserve their cash, Virgin Australia could find the time is right – and the price is right – to place an advance order for the Boeing 787 Dreamliners with which it intends to relaunch long-range travel.
Under new owners Bain Capital and in the face of COVID-led border closures, Virgin shed its Airbus A330 and Boeing 777 jets to become, in the short term, a domestic-only airline built around the Boeing 737.
But Bain is backing the plan of airline CEO Paul Scurrah to restart its routes to Los Angeles and Tokyo “when sufficient demand returns” with the economic benefits of a single type of aircraft – the fuel-efficient Boeing 787.
"We did a lot of work pre-administration on replacing both those aircraft types with a more efficient, newer version of a wide-body," Scurrah has previously noted.
"We do think it will be a very slow recovery in the international sector… but we have no belief that we will struggle to get the aircraft to fly those routes.”
In terms of size and the number of seats offered, Virgin Australia would find the Boeing 787-9 hits a sweet spot between the large Boeing 777-300ER and the more mid-sized Airbus A330.
Virgin’s initially proposed order was said to be for eight Boeing 787s, which would replace its six Airbus A330s (most of which flew domestic east-west routes, along with the aborted Hong Kong and Tokyo services) and five Boeing 777-300ERs (dedicated to the trans-Pacific corridors between Sydney, Melbourne and Brisbane and LAX).
Brendan Sobie, analyst at Singapore-based Sobie Aviation, suggests that the current climate of airlines pushing back on orders makes this “certainly a buyer's market.”
“For new aircraft, there are plenty of available slots in the near future,” Sobie tells Executive Traveller, although he cautions that as the market “is likely to remain soft for some time, Virgin Australia should not be compelled to make any commitments this year.”
Virgin will also enjoy some leverage on its $2.5 billion contract for 48 of Boeing’s troubled 737 MAX jets – the first of which is still due in July 2021 – with the possibility that some or even all of the order could be swung over to the Boeing 787.
However, “it would be sensible for Virgin Australia to wait a while in deciding on whether to reuse its MAX deposits for Boeing 787s,” Sobie says.
“It could always use these deposits for a new or renegotiated MAX order as Virgin Australia will eventually need to replace its Boeing 737-800s and resume narrow-body growth.”
The new shape of trans-Pacific business class
Rival Qantas doesn’t expect to resume long-rang international flights until mid-2021, with a return to the USA likely to be an end-of-year proposition.
"We believe the earliest we're going to see the international borders opening up is the middle of next year," Qantas Group CEO Alan Joyce remarked at a media briefing following the airline's revelation of a $2.7 billion loss for the 2020 financial year.
“With the US, with the level of prevalence there it's probably going to take some time and probably going to need a vaccine before we could see that happening," Joyce elaborated.
"Countries like the US may be the first country to have widespread use of that vaccine, so that could mean that the US is seen as a market by the end of 2021.”
When Virgin Australia does recommence flights between Australia and Los Angeles, here’s what it’ll likely be going up against in terms of business class.
With its Airbus A380s now sitting in storage until at least 2023, Qantas will really on the Boeing 787 Dreamliner – fitted out with the latest generation of the airline’s Business Suite business class – as its international workhorse.
Qantas’ partner American Airlines usually flies a Boeing 787-9 between Sydney and Los Angeles, although this at times has been swapped for the Oneworld member’s flagship Boeing 777-300ER.
Ironically, American’s Boeing 787-9s have the same model business class seat as Virgin Australia used to fly…
… while American’s Boeing 777 business class is also familiar, but this time to regular business travellers on Cathay Pacific.
United Airlines continued to upgrade its own Boeing 787s, which fly from Sydney and Melbourne to Los Angeles, with the latest Polaris business class cribs.
Virgin’s US joint venture partner Delta Air Lines boasts Delta One business class suites with sliding privacy doors.