Virgin Australia pushes back on Boeing 737 MAX deliveries

By David Flynn, February 17 2017
Virgin Australia pushes back on Boeing 737 MAX deliveries

Virgin Australia will delay its delivery of new Boeing 737 MAX jets to late 2019 to help bring costs under control and steer the airline back into solid profit.

Virgin previously intended to collect the keys to the first of 40 of the fuel-efficient 737 MAX-8 jets – a successor to its domestic Boeing 737-800 workhorse – in 2018, although that date had been moved forward from a previously-pencilled 2019.

Now things are back where they started, with the deferral claimed to push back $350 million of capital spending.

Virgin Australia is still taking deliveries of the Boeing 737-800, and plans to grow that fleet by five more over the coming year.

Boeing claims the 737 MAX-8 will be sip 20% less fuel than its popular predecessor, and will also feature quiet engine technology to "significantly reduce its noise footprint".

Virgin Australia Group CEO John Borghetti has previously praised the MAX's avgas-sipping traits, saying "our desire has always been to have the most fuel-efficient, modern aircraft possible and clearly the opportunities that we see in front of us with the MAX and converting some orders to the MAX is very important."

New high-efficiency engines and refined aerodynamics – including eye-catching split wingtip designs – are at the core of the 737 MAX's fuel-friendly nature.

The announcement to delay the Boeing 737 MAX deliveries came as part of the airline's declaration of financial results for the July-December 2016 period.

Those numbers showed Virgin saw its underlying pre-tax earnings for the half-year almost halved, down to $42.3 million in pre-tax profit compared to $81.5 million in July-December 2015.

However, associated costs including restructuring charges and 'fleet simplification' sunk this to an overall loss of $A21.5 million.

Virgin will also continue to slim down the variety of aircraft in its domestic fleet by selling the last six of its Embraer E190 jets.


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.