Virgin Australia pushes back on Airbus A350, Boeing 787 decision

By David Flynn, October 10 2014

Virgin Australia doesn't expect to see the Airbus A350 or Boeing 787 join its fleet until sometime after 2020, with CEO John Borghetti tipping this 'A or B' decision will be made in the next two years.

Borghetti has previously spoken of the advanced jets in a 2017 timeframe, at which point either the A350 or the Dreamliner would replace both the Airbus A330 and Boeing 777.

But "we've stretched it out because we've found the A330 and the 777 to be so good", Borghetti tells Australian Business Traveller.

"We've got the best of both worlds right now. In my view the Boeing 777 is better than a 747 or anything else of that nature, and the A330 is the perfect aircraft in its class. This is a fleet that we're comfortable with until 2020-odd."

The recent retirement of Virgin's first two ex-lease Airbus A330s means the airline's six-strong A330 fleet is "brand new," Borghetti says, with the oldest jet dating back to just mid-2012.

"They're terrific, they're very efficient and now we've got new business class seats to put in them, so there's no rush to replace them."

"That doesn't mean that we're going to wait until 2019 to make a decision – we'll make that decision sometime over the next year or two – but it would be for deliveries beyond 2020 and not before."

Multi-airline 'bulk buy' is possible

Last month Borghetti admitted he would consider placing a shared order for either the Airbus A350 or Boeing 787 with partners Etihad Airways, Singapore Airlines and Air New Zealand.

"Could we, would we, talk to our three partners in terms of how we do this together? Within legal bounds, absolutely," Borghetti said.

But any decision on the next-gen jetliners is still some time away, and Borghetti isn't about to pick favourites.

"The A350 and Boeing 787 are both excellent aircraft."

"I recently had the pleasure of seeing the A350 and was stunned from a consumer aspect" he commented on the recent Sydney visit of the Airbus A350 – which he praised as "a very impressive aircraft" with a "seriously ­outstanding" design – "but I'm equally confident that the 787 is good."

Qantas has also pushed back the first five options of its 50-strong Boeing 787-9 order from ?2016 to 2017 to help speed the airline's climb back to profitability.

"The Boeing 787 is an excellent aircraft and remains an important part of our future" said Qantas CEO Alan Joyce.

Read: Qantas delays delivery of Boeing 787-9 Dreamliners

Follow Australian Business Traveller on Twitter: we're @AusBT

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

12 Jun 2013

Total posts 744

In today's exciting airline news: somebody might make a decision about something at some point in the indefinite future!

Check back in two years to see which of two fairly similar aircraft they've decided to go with! 

AlG
AlG

04 Nov 2010

Total posts 674

Given that VA previously said they'd make a decision by about now, for their 2017 fleet, I do think this is of interest Hugo.

Qantas - Qantas Frequent Flyer

25 Sep 2013

Total posts 1136

LOL Hugo

30 Aug 2013

Total posts 448

I don't think we will ever see a 787 in QF colours.

Can someone please explain the difference between the 787 and A350?

As far as I can tell it's essentially the same type of equipment (same capacity, fuel efficiencies, operating cost etc.), which brings me to the next point: Who cares?

Maybe the bigger story is that neither Boeing nor Airbus has blinked first in this game of brinkmanship, and VA is using the media to create the impression that it is still undecided so as to provide impetus to both manufacturers that there is still scope for further discounts?

Qantas - Qantas Frequent Flyer

30 May 2013

Total posts 303

Correct me if I'm wrong, but from a passenger perspective, the A350 could be a more comfortable ride. With 9 seats abreast with each seat 18 inches wide, this is better than the current seat width on the 787's - which most airlines are chooisng 9 abreast for.

Qantas - Qantas Frequent Flyer

23 Mar 2012

Total posts 210

Until someone comes along and decides to put 10 abreast...as in the 777. 

Qantas - QFF Platinum

20 Mar 2012

Total posts 213

TRB the A350 is a larger aircraft than the 787 with the A350-900 more equivalent in size to the 777-300 than the 787 (dash 8 or 9). I believe the A350-1000 is along the lines of the 777-8X with only the 9X being larger still. (although I stand to be corrected on any of these assumptions)

So while the A350 may be able to replace both the A332/777 at VA I believe they'll struggle to do that with the 787 as it may prove too small for US flights unless their frequency was adapted to suit.

I think the wider story for VA is that with a $300 million plus loss while investing new funding in onboard products on relatively new capital (all A332's from mid 2012 onward, 777-300ER possibly the most efficient aircraft across the Pacific at the moment) there is no pressure to buy new planes when they're not in a capacity drive. Qantas has assisted in a sense by pushing the 789 back to 2017 and taking the pressure off investing in the next gen of aircraft in our region.

Thanks Josh for the clarification!

Isn't UA doing the 787 trans-pacific to MEL?

How is it then that the 787 is too small for US flights?

I don't believe the A350 or 787 was meant to replace the 777 series. 

Qantas - QFF Platinum

20 Mar 2012

Total posts 213

UA have two other daily services to SYD as well as thier upcoming MEL flight whereas VA only have their two sole BNE/SYD services now so VA, I assume, would want a bigger aircraft due to fewer frequencies

Also worth remembering that UA downgauged from a 747 to a 777 so they're recouping some of the market ceded earlier this year with the new MEL direct service.

Would be interesting to know what their net seats per week would be from Oct 28 vs a year earlier though

Correct, 787 and/or A350 weren't supposed to replace 777, I was talking more in the context of VA's fleet.

am
am

15 Apr 2011

Total posts 586

The A350-900 is slightly larger than the 787-9, but only by the equivalent of about 4 rows in Economy Class. It's still far smaller than the 777-300, and sits in the same bracket as the 777-200 in terms of capacity. The A350-1000 will compete with the 777-300 and -8X while the -9X will be a step up in size. 

My opinion is that the 777-300ERs are far too big for Virgin's international operations. They've struggled to gain traction with services to LA from Melbourne and Brisbane (and are now fleeing from Melbourne to let Qantas and United fight it out) and from Sydney to Abu Dhabi. 

They need to actively focus on improving their frequency and competitive position, which in turn will improve their yield and make them a more viable option against Qantas. A few extra routes/destinations (which smaller aircraft would make possible) wouldn't hurt either. There's no point in having a 350 seat plane if you're filling all those seats at/below cost. 

Domestically, the 787 is probably the better option while I think A350s are better for international. It could really go either way, though I expect the A350 will end up winning it (for the simple fact that it's different to what Qantas will be flying!). 

Qantas - QFF Platinum

20 Mar 2012

Total posts 213

Thanks for clarifying am, I had a feeling I was out on the aircraft sizes. 

I agree that VA is probably using an aircraft that is too big at the moment but as the market grows they'll probably be in the market for something the same size, if not slightly bigger, in 2020

Qantas - Qantas Frequent Flyer

17 Aug 2012

Total posts 2221

I agree that the 77W was probably not the best aircraft for VA, but I recall that some time ago somebody commented that what VA should have done is reconfigure their aircraft completely, with fewer premium seats and a much denser economy cabin to reduce cost per available seat mile, then pack it to the gills with low-yielding passengers. It's not as if trans-Pacific routes have insufficient demand. (Abu Dhabi is a bit pointless, though, and I think that route should be handed back to Etihad immediately. The frame freed up should be used for more TPAC flights.)

The idea behind this course of action is that it would give VA the lower cost base that would allow them to sell cheaper fares to draw more passengers to fill up the plane. I think this ship hasn't sailed quite yet, so hopefully we'll see their aircraft better used.

I think Borghetti is right on the money, though. They have excellent frames, all mostly quite new, and don't actually need to do anything about it for the next five years.

Virgin Australia - Velocity Rewards

19 Feb 2014

Total posts 451

The A350 is up to 9% more fuel efficient as well I think.

Qantas - Qantas Frequent Flyer

28 Sep 2012

Total posts 132

There is also the talk that the 350 will have extended Etops over the 787. From what I have been reading, the extended ETOPs (up to 420) will essentially remove a barrier of airlines like QF "needing" to maintain a fleet of 744's with 4 engines to do their current long hauls to JNB and SCL?

Lufthansa - Miles & More

29 Jul 2014

Total posts 185

Personally I think that the best option would be 787-9/-10 to replace a330 and the 777-8x possible 777-9x to replace the 777-300er and with the 737 Max it would make easier pilot training ....... And it would make fleet mantince with anz very compatible still!!!!


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