Air Canada bets big on Boeing 737 MAX

Air Canada bets big on Boeing 737 MAX

Air Canada today announced its mainline narrowbody fleet renewal plan that includes commitments, options and rights to purchase up to 109 Boeing 737 MAX aircraft.

The new aircraft will replace Air Canada’s existing mainline fleet of Airbus narrowbody aircraft, creating one of the world’s youngest, most fuel efficient and simplified airline fleets.

The agreement with Boeing, which is subject to completion of final documentation and other conditions, includes firm orders for 33 737 MAX 8 and 28 737 MAX 9 aircraft with substitution rights between them as well as for the 737 MAX 7 aircraft.

It also provides for options for 18 aircraft and rights to purchase an additional 30.

Deliveries are scheduled to begin in 2017 with two aircraft, 16 aircraft in 2018, 18 aircraft in 2019, 16 aircraft in 2020 and nine aircraft in 2021, subject to deferral and acceleration rights.

“We are pleased to announce our agreement with Boeing for the purchase of 737 MAX aircraft as part of the ongoing modernization of Air Canada’s fleet,” said Calin Rovinescu, president, Air Canada.

“Renewal of our North American narrowbody fleet with more fuel efficient aircraft is a key element of our ongoing cost transformation program and the enhanced passenger cabin comfort provided by the Boeing MAX will help us to retain Air Canada’s competitive position.

“Our narrowbody fleet renewal program is expected to yield significant cost savings.

“We have estimated that the projected fuel burn and maintenance cost savings on a per seat basis of greater than 20 per cent will generate an estimated CASM reduction of approximately 10 per cent as compared to our existing narrowbody fleet.”

Air Canada continues to evaluate the potential replacement of its Embraer E190 fleet with more cost efficient, larger narrowbody aircraft that are better suited to its current and future network strategy.

Consistent with this strategy, the agreement with Boeing provides for Boeing to purchase up to 20 of the 45 Embraer E190 aircraft currently in Air Canada’s fleet.

The E190 aircraft exiting the fleet will be initially replaced with larger narrowbody leased aircraft until the airline takes delivery of the Boeing 737 MAX aircraft. 

The company will be reviewing various options over the next six months for the remaining 25 Embraer E190 aircraft including continuing to operate them or replacing them with a yet to be determined number of aircraft in the 100 to 150 seat range.