Air Canada to the MAX

written by australianaviation.com.au | April 2, 2014
Air Canada has ordered 61 Boeing 737 MAXs and taken options and purchase rights on an additional 48. (Boeing)
Air Canada has ordered 61 Boeing 737 MAXs and taken options and purchase rights on an additional 48. (Boeing)

Boeing and Air Canada have finalised contract arrangement on a deal for 61 new Boeing 737MAX narrow-bodies.

The order is valued at US$6.5bn (A$7.03bn) at list prices, and comprises 33 737MAX 8s and 23 MAX 9s. Air Canada has also taken options on 18 and purchase rights on an additional 30 737 MAXs.

“Our narrow-body fleet renewal program with the 737 MAX is expected to yield significant cost savings and is a key element of our ongoing cost transformation program ,” President and CEO of Air Canada, Calin Rovinescu said in a statement. “Projected fuel and maintenance cost improvements of more than 20 per cent per seat will generate an estimated CASM reduction of approximately 10 percent compared to our existing narrow-body fleet. In addition, the 737 MAX offers improvements to the environment, making this the best choice for Air Canada.”

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The new aircraft will be powered by CFM International LEAP-1B engines, currently the only engine choice for the MAX.

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4 Comments

  • australianaviation.com.au

    says:

    The 739 looks great in Air Canada colours!

  • Raymond

    says:

    Hello Andrew,

    Would you be able to explain what ‘taking options and purchase rights’ essentially means please?

    Basically, what benefits does the customer get out of it and what does the manufacturer get if the additional sale doesn’t go ahead?

    Thanks

    • australianaviation.com.au

      says:

      It means you essentially reserve places in the production line which you have to confirm or release by an agreed expiry date which usually coincides with the start of production of long-lead items. Options usually require a deposit which may or may not be refundable – I’m sure the terms vary depending on your value as a customer and on the popularity of the aircraft model.
      Cheers
      Andrew

  • Raymond

    says:

    Thanks very much Andrew, appreciate your help.

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