American Firms 737 Order, Virgin America Adds A320's

Orders taken by both Boeing and Airbus at the Farnborough Air Show may keep assembly lines busy for quite some time. On Thursday, Azerbaijan Airlines announced it had signed an agreement to substitute two Next-Generation 737 airplanes for one 767-300ER (extended range) and two 767 Freighters, a new model type for the Baku, Azerbaijan-based airline. The substitution has been updated on Boeing's Orders and Deliveries website.

"With our centralized geographic location, Azerbaijan is becoming a busy hub in the region between east and west and north and south," said Jahangir Askerov, president of Azerbaijan Airlines. "We are capitalizing on this development by expanding our long-haul passenger fleet and growing our cargo business with the proven efficiencies of the 767 Freighter."

Including Thursday's announcement, Azerbaijan Airlines has a total of eight Boeing airplanes on order: two 767-300ERs, two 767 Freighters, two Next-Generation 737s and two 787-8s.

"With the economic recovery gaining momentum at various speeds around the world, our customers are making changes to their fleets to accommodate the upturn," said Marlin Dailey, vice president of Sales, Boeing Commercial Airplanes. "We have worked with Azerbaijan Airlines to make changes to its order book that meet its needs."

Wednesday, Boeing announced American Airlines has exercised options for an additional 35 Next-Generation 737-800s. The order is part of American Airlines' ongoing fleet renewal plan, replacing MD-80s with Next-Generation 737s. The 737-800 is 35 percent more fuel efficient on a seat-mile basis than the MD-80s it will replace.

"American Airlines is leveraging all the performance benefits of the Next-Generation 737 to enhance the airline's competitive position, while providing an enhanced passenger travel experience," said Marlin Dailey, vice president of Sales for Boeing Commercial Airplanes. "American's investment in additional 737s demonstrates real confidence in the 737's technology and economics. In addition, the new interiors on its existing 737 fleet and the new 737 Boeing Sky Interior on deliveries starting in 2011 will ensure American's customers continue to enjoy an exceptional flying experience."

"The 737-800 provides additional amenities for our customers while helping to reduce our operating and fuel costs and lessen our impact on the environment," said Virasb Vahidi, chief commercial officer for American Airlines. "The 737 is a product that benefits all of American's stakeholders and is a good fit for our current fleet renewal plans."

Closer to home, for Farnborough at least, Virgin America said on Thursday that it plans to order 40 new Airbus A320 aircraft, with options for 20 additional aircraft. The new aircraft would be delivered from 2013 through 2016 - with 10 firm orders per year on average, and options for 20 additional aircraft in 2017-2018. With today's order of 40 new aircraft and growth from other sources, Virgin America's fleet is projected to grow from its current 28 aircraft to 90 aircraft by 2016 - a compounded annual growth rate of 21.5 percent. David Cush, Virgin America President and CEO, and John Leahy, Airbus Chief Operating Officer, make the announcement of their memorandum of understanding Thursday at the Farnborough International Airshow.

"This MOU reflects confidence in our financial performance, business model and unique service. Despite the tough economic climate since our 2007 launch, Virgin America has experienced record growth, strong financial progress and a sweep of the major reader-based travel awards. At a time when most carriers are contracting and shedding jobs, we're pleased to be growing and bringing our low-fare, innovative service into new markets," said Virgin America President and CEO David Cush. "The low operating costs, cabin comfort and carbon-efficient design of our all new Airbus fleet will continue to fuel our growth and success in the North American market."

With the U.S. DOT's approval of its new ownership structure in January 2010, Virgin America says it is focused on growth - with six additional aircraft entering its fleet this year and 12 additional aircraft planned in 2011. The airline currently has four aircraft for delivery in 2012 and expects to look for additional aircraft for 2012, in order to bridge its fleet growth to the new Airbus order starting in 2013.

FMI: www.boeing.com, www.airbus.com