Air Canada, currently an operator of the Airbus A320 family, will renew its mainline narrowbody fleet with Boeing 737 MAX jets.
Montreal-based Air Canada has secured commitments, options and rights to purchase up to 109 Boeing 737 MAX aircraft. The new Boeing 737 MAX jets will replace Air Canada’s existing mainline fleet of Airbus A320-family narrowbodies and at least 20 of its Embraer 190s.
Air Canada’s agreement with Boeing, which is subject to completion of final documentation and other conditions, includes planned firm orders for 33 Boeing 737 MAX 8 and 28 737 MAX 9 aircraft ‒ with substitution rights between them as well as for 737 MAX 7s.
The agreement also provides for options for 18 aircraft and rights to purchase an additional 30.
Deliveries of the 737 MAX jets to Air Canada are scheduled to begin in 2017 with two aircraft, 16 aircraft in 2018, 18 aircraft in 2019, 16 aircraft in 2020 and 9 aircraft in 2021, subject to delivery deferral and acceleration rights.
“Our narrowbody fleet renewal program is expected to yield significant cost savings,” says said Calin Rovinescu, president and CEO of Air Canada. “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 [cost per available seat mile] reduction of approximately 10 per cent as compared to our existing narrowbody fleet.”
Air Canada says it is continuing to evaluate the potential replacement of its Embraer 190 fleet with more cost-efficient, larger narrowbody aircraft that are better suited to its current and future network strategy.
Consistent with this strategy, its agreement with Boeing provides for Boeing to purchase up to 20 of the 45 Embraer 190 jets currently in Air Canada’s fleet.
The Embraer 190s exiting the fleet will be initially replaced with larger narrowbody leased aircraft until the airline takes delivery of its new Boeing 737 MAX jets.
Air Canada says it will be reviewing various options over the next six months for the remaining 25 Embraer 190s, including continuing to operate them or replacing them with a yet-to-be-determined number of aircraft seating 100 to 150 passengers.
Should Air Canada decide on the latter course, this could make it a potential customer for the Bombardier CSeries and Embraer E-Jet E2 families, or for the Boeing 737 MAX 7.
Air Canada’s plan is for its total fleet, including its Air Canada rouge leisure arm but excluding aircraft flown by its contracted regional-airline partners, to grow from 192 aircraft as of September 30, 2013 to approximately 214 by the end of 2019.
Additionally, for further growth flexibility, Air Canada holds existing options on 13 Boeing 787 widebodies and rights to purchase 10 more, and rights to purchase 13 Boeing 777s. These are in addition to its new options on 18 737 MAX jets and purchase rights for 30 more.