Virgin Australia Changes 737 MAX Order, Defers 1st Delivery

   By Robb M. Stewart 
 

MELBOURNE, Australia--Virgin Australia Holdings Ltd. (VAH.AU) has committed to buying 48 Boeing Co. (BA) 737 MAX aircraft, but has deferred the first delivery and shifted to more of the larger MAX 10s.

The announcement was made shortly after Boeing Chief Executive Dennis Muilenburg rejected criticism of how the aerospace company designed a 737 MAX flight-control system that accident investigators have implicated in two fatal crashes of the jetliner.

Paul Scurrah, CEO and Managing Director of the Australian carrier, reiterated no new aircraft would be introduced to the fleet until the company was completely satisfied with its safety.

"We are confident in Boeing's commitment to returning the 737 MAX to service safely and as a long-term partner of Boeing, we will be working with them through this process," Mr. Scurrah said.

In agreement with Boeing, Virgin Australia said it would defer delivery of the first 737 MAX aircraft to July 2021 from November 2019. It wold also convert an additional 15 of the 737 MAX 8s on order to MAX 10s instead, with the first MAX 10 set to be delivered in 2021 and the first MAX 8s due in 2025.

In all, Virgin Australia has now ordered 25 MAX 10s and 23 MAX 8s, where the split was previously 10-38 in favor of the smaller 737 MAXs.

The change will result in a significant deferral of capital expenditure and provides the carrier with the economic benefits of the MAX 10 aircraft, it said. Virgin Australia said it would now extend the use of its existing jetliners in a relatively young fleet.

Technical specifications for the 737 MAX, on Boeing's website, show the MAX 8 is designed with a maximum of 210 seats and has a range of 3,550 nautical miles, while the MAX 10 will have up to 230 seats and a range of 3,300 miles.

On Monday, Mr. Muilenburg said Boeing engineers and technical experts have been working on a software fix for the 737 MAX since days after the Oct. 29 crash of a Lion Air airplane in Indonesia, killing all 189 on board. The fix has yet to secure approval from the Federal Aviation Administration and other world regulators that grounded the aircraft following a March 10 crash of a second 737 MAX in Ethiopia.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

April 29, 2019 19:15 ET (23:15 GMT)

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