View Full Version : Virgin Blue fleet update

17th Dec 2002, 06:03
From Ozflight

Photo: Craig Murray

OzFlight Report
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Fleet update

Last Thursday, Virgin Blue Chief Executive Officer Brett Godfrey detailed the current position of the airline’s moves to re-equip its fleet of 737 aircraft.

“We already operate the world’s youngest fleet of Boeing aircraft. By February we will operate the youngest fleet of aircraft by any manufacturer in the world” Godfrey said.

The airline has already made it clear that Boeing is the front-runner in the new fleet acquisition. The American manufacturer appears to have been the favourite almost from day one. Virgin Group Chairman Richard Branson, when speaking with OzFlight.com.au back in August, made it very clear that Boeing was ahead on points.

When asked about the timeline for a public announcement Godfrey said “we are very very close to a final decision. We have a few items that we still want to extract, and until we get those items we will fail to make an announcement on it.”

“We will never be pushed to anyone’s timetable, we wanted to get it done before Christmas. Still a chance, we’ve had discussions with the interested parties over the past 48 hours. In fact they’ve been in our office for the last couple of days. If we haven’t got it done by Christmas its only cause we haven’t got what we wanted.” Godfrey explained

“A lot of airlines make announcements and then go to finance and go to final documentation. That’s kind of silly cause it leaves yourself open to times when you have to cancel or change things. So we’re just not going to say anything until we get it done.”

The airline currently operates a fleet of predominately “Next Generation” Boeing 737 aircraft. Of the 28 aircraft only one 737-300 and one 737-400 remains. Both of these ‘classic’ series are to be returned within the next three months and replaced with four NG series that will take the fleet to 30. In the 12 months following March the airline expects to take delivery of a further 10 aircraft however it is yet to decide who will provide these aircraft.

“The additional four, cause two go home, are committed Boeing. But that doesn’t mean anything as they are all on operating lease and can be returned within four years and that’s a swap out. You don’t get all of your planes at one time anyway. The additional ones to get to 40 are either Airbus or Boeing. If it’s Boeing we take a lot more and we do a fleet swap out. If it’s Airbus we need less cause we already have 30 aircraft on the ground.”

The airline has recently announced its partnership with BoeingFlightSafety for the development of a $20 million flight simulation training facility at Brisbane Airport. Virgin Blue currently sends its pilots to Hong Kong for re-currency training that puts them out of action for at least a week. The investment of $10 million by the airline will see all of its training conducted at the Brisbane facility and provide a payback period of just 18 months.

When asked how much this deal integrated with the fleet agreement Godfrey said “lets be pretty clear, Boeing have the inside running, there’s no doubt about that. But we haven’t let Airbus off the hook and nor have they haven’t let us off the hook. The are extremely aggressive and in fact they have had a team based down here in Sydney for months now.”

The on-going battle between Boeing and Airbus over this deal appears to be heating up as it comes to a head. However the claims made by Brett Godfrey and Virgin Blue come as a complete surprise to Airbus.

Airbus representative Ted Porter came out at the end of the week with a statement in relation to the fleet upgrade at Virgin Blue. “Can I just clarify a wire serve item this week which stated that ‘Boeing is the front-runner to win the Virgin Blue contract’ to reequip the fleet, the inference being that there has been some ongoing, hard-fought, sales campaign to win the business. This is not the case. For the record, Airbus submitted its proposal to Virgin Blue back in June, and since then we have been awaiting their decision. There has been no ongoing campaign, at least none involving Airbus.”

Mr Porter was also surprised by Mr Godfrey's comments about Airbus having a special team based in Sydney for several months. "Not sure what that's about. Airbus have had a Sydney Sales Office for about 10 years" he said.

The question must then be put, who is it that Virgin Blue is negotiating with other than Boeing. Could it be that the only negotiation left is to see how much the airline can force down Boeing’s bottom dollar.


17th Dec 2002, 09:46
It seems pretty obvious from this that Boeing will get the
order, wonder how many will be devoted to international
operations out of 40.

Sperm Bank
17th Dec 2002, 09:54
It's also pretty obvious that Mr Godfrey should get his facts/fiction straight before speaking to the media!

17th Dec 2002, 22:57
It seems that DJ may have been trying to give the impression of some competitive tension. Probably to force down price but maybe to make them feel more important. It seems Airbus may have blown DJ's cover.

Obviously Airbus has felt that their chances of winning this order have always been pretty limited so have not engaged in any tit-for-tat discounting. Now Boeing knows that this is the case, it's unlikely there will be any more pencil sharpening by them either.

We can only hope that DJ get on with it and make the announcement but knowing them they can't do it with a simple signing ceremony and announcement. Instead we'll have to "look forward" to the inevitable media stunt with the omnipresent Sir Richard and probably some very embarassed Boeing reps in attendance.