As seen in a recent article, Virgin has delayed the 737 MAX deliveries from 2018 to 2019. I think it is because of their financial position, however they seem to refuse that this is the reason. What are your thoughts? According to Australian Aviation, it appears to look like they are avoiding that fact. Thanks!
Virgin have a cash flow problem that so far they have kept on top of by going back to their investors asking for more cash. Taking delivery of aircraft requires a very considerable outlay of cash, which they don't have. I think it's as simple as that.
I wonder if they're having buyers remorse..? The A320/1 NEO option looks to be a better aircraft, but VA are simplifying their fleet to Boeing type's...
From what I know, Virgin's domestic operations are pretty profitable; its the international ops where they are getting hammered. Correct me if I'm wrong here.
The 737 Max is thus arguably not really necessary just yet. They have relatively new 737-800s so that puts them on parity with QF. They can afford this delay.
What I do wonder is what Virgin will do to replace the E-Jets...
No reason for Virgin Australia to swap to an A320/321neo, they have a solid investment in the Boeing 737 including pilots and engineers, the MAX is simply a next-gen version of this platform. The 737 fleet is also relatively young and they're still arriving, five more this year (which can backfill against E190 drawdown, also allowing for capacity reduction as needed). Pushing back the first 737 MAX delivery also means they can push back over $350 million of capex associated with the 737 MAX program, according to the results statement, so that's one big hit on the books which now doesn't need to impact until the 2020 FY.
No reason for Virgin Australia to swap to an A320/321neo, they have a solid investment in the Boeing 737 including pilots and engineers, the MAX is simply a next-gen version of this platform. The 737 fleet is also relatively young and they're still arriving, five more this year (which can backfill against E190 drawdown, also allowing for capacity reduction as needed). Pushing back the first 737 MAX delivery also means they can push back over $350 million of capex associated with the 737 MAX program, according to the results statement, so that's one big hit on the books which now doesn't need to impact until the 2020 FY.
Despite my earlier comment I agree with you David. By simplifying the fleet they become (a) attractive to Boeing, and (b) can utilise this to optimise the efficiencies of the MAX over NEO - I'm sure some pretty smart guys at VA have done the math and realised that a seriously good price on MAX plus optimised upgrade costs (i.e. crew re-training etc) means its a better option.
Where the MAX vs NEO discussion gets confused is where you have carriers like Qantas and AA running a mix of both types - but that's not really a topic for this community..!
Where the MAX vs NEO discussion gets confused is where you have carriers like Qantas and AA running a mix of both types - but that's not really a topic for this community..!
Oh, almost anything's a topic for this community – if people here care enough to discuss it, they can start a thread on exactly that. This is one reason we opened the community forums. :)
The Ethiopian preliminary report sealed it for me. The
things we have found out about the design shortcomings of the rehashed 50 years
old design to make the 737 Max are scary. Unfortunately for 346 passengers on
the Lion Air and Ethiopian planes they were unlucky enough for a number
of these shortcomings to line up at the same time for the flights to crash
killing them all. To my way of thinking it is more like after decades of pushing
the envelope in making a 1960’s technology plane bigger and with more and more
powerful engines while still keeping the safety record, Boeings luck finally
ran out. The trim problem that has got worse with each new engine upgrade since
the 80’s, an automated flight system that goes back to the 60’s, the new engine
mounting position, a poorly written software patch and one faulty sensor all
seem to have compounded one problem on top of another to cause these 737 Max to
crash. Some commentators have speculated that an even more experienced crew
with better training and strong enough to apply more force on the controls may
have saved one or both of the planes.
My point of view is that I do not trust Boeing or the FAA
any more. Even if they fix one or two of these shortcomings the rest remain. I
do not want to rely for my safety on having a pilot who is some sort of super
hero. As I see it there are plenty of more modern design planes to fly in. Why
fly on the 737 Max. These crashes happened in good weather. What happens when it is really bad weather,
late at night with a tired crew? I want a plane as modern and well designed as
possible not a Max thankyou.
For domestic travel in Australia. Qantas has not ordered the
Max, and Jetstar do not fly the 737 and Tiger only get hand me downs. It is
only Virgin who have ordered the 737 Max for delivery later this year. If I
want to avoid the Max, then no longer flying Virgin will achieve that. For
domestic trips easy to do and not very painful.
My dilemma comes with my USA trips. The Virgin 777 is my
clear favourite aircraft for USA trips. But this means a domestic flight to
Sydney. Even if I avoid the 737 Max when I book, Virgin can change my domestic flight
number or the aircraft for that flight number between when I book and when I
fly. I am about to start booking my 2020
USA trips. How much risk am I taking that I will end up on a 737 Max? And will
I be able to change if I get put on the 737 Max.
Most holiday passengers often do not know what plane model
they are booked on, much less care, except maybe know that the A 380 is a popular
choice. Business travellers are
different, they care, they network and generally do have a preference. If a
couple of people in their work group or network refuses to fly the 737 Max how
long is it before the rest say why am I taking the risk when I do not need to?
I wonder what affect it will have on Virgins hard won
business market share by them choosing to drop the A 320 and go the 737 Max for
the overall Virgin Australia group?
Hi Guest, join in the discussion on
Virgin 737 MAX delay
Packetman21
Packetman21
Qantas - Qantas Frequent Flyer
Member since 28 Jul 2016
Total posts 68
As seen in a recent article, Virgin has delayed the 737 MAX deliveries from 2018 to 2019. I think it is because of their financial position, however they seem to refuse that this is the reason. What are your thoughts? According to Australian Aviation, it appears to look like they are avoiding that fact. Thanks!
David
David
Member since 24 Oct 2010
Total posts 1,021
Just for reference, in case people are wondering: Virgin Australia pushes back on Boeing 737 MAX deliveries
Speak
Speak
Member since 30 Dec 2014
Total posts 25
Virgin have a cash flow problem that so far they have kept on top of by going back to their investors asking for more cash. Taking delivery of aircraft requires a very considerable outlay of cash, which they don't have. I think it's as simple as that.
markpk
markpk
Qantas - Qantas Frequent Flyer
Member since 29 Nov 2013
Total posts 459
I wonder if they're having buyers remorse..? The A320/1 NEO option looks to be a better aircraft, but VA are simplifying their fleet to Boeing type's...
StudiodeKadent
StudiodeKadent
Member since 20 May 2015
Total posts 109
From what I know, Virgin's domestic operations are pretty profitable; its the international ops where they are getting hammered. Correct me if I'm wrong here.
David
David
Member since 24 Oct 2010
Total posts 1,021
No reason for Virgin Australia to swap to an A320/321neo, they have a solid investment in the Boeing 737 including pilots and engineers, the MAX is simply a next-gen version of this platform. The 737 fleet is also relatively young and they're still arriving, five more this year (which can backfill against E190 drawdown, also allowing for capacity reduction as needed). Pushing back the first 737 MAX delivery also means they can push back over $350 million of capex associated with the 737 MAX program, according to the results statement, so that's one big hit on the books which now doesn't need to impact until the 2020 FY.
markpk
markpk
Qantas - Qantas Frequent Flyer
Member since 29 Nov 2013
Total posts 459
David
David
Member since 24 Oct 2010
Total posts 1,021
Packetman21
Packetman21
Qantas - Qantas Frequent Flyer
Member since 28 Jul 2016
Total posts 68
That all seems realistic. Thanks for your thoughts!
giantbird
giantbird
Etihad - Etihad Guest
Member since 05 Apr 2019
Total posts 4
737 Max not for Me
The Ethiopian preliminary report sealed it for me. The things we have found out about the design shortcomings of the rehashed 50 years old design to make the 737 Max are scary. Unfortunately for 346 passengers on the Lion Air and Ethiopian planes they were unlucky enough for a number of these shortcomings to line up at the same time for the flights to crash killing them all. To my way of thinking it is more like after decades of pushing the envelope in making a 1960’s technology plane bigger and with more and more powerful engines while still keeping the safety record, Boeings luck finally ran out. The trim problem that has got worse with each new engine upgrade since the 80’s, an automated flight system that goes back to the 60’s, the new engine mounting position, a poorly written software patch and one faulty sensor all seem to have compounded one problem on top of another to cause these 737 Max to crash. Some commentators have speculated that an even more experienced crew with better training and strong enough to apply more force on the controls may have saved one or both of the planes.
My point of view is that I do not trust Boeing or the FAA any more. Even if they fix one or two of these shortcomings the rest remain. I do not want to rely for my safety on having a pilot who is some sort of super hero. As I see it there are plenty of more modern design planes to fly in. Why fly on the 737 Max. These crashes happened in good weather. What happens when it is really bad weather, late at night with a tired crew? I want a plane as modern and well designed as possible not a Max thankyou.
For domestic travel in Australia. Qantas has not ordered the Max, and Jetstar do not fly the 737 and Tiger only get hand me downs. It is only Virgin who have ordered the 737 Max for delivery later this year. If I want to avoid the Max, then no longer flying Virgin will achieve that. For domestic trips easy to do and not very painful.
My dilemma comes with my USA trips. The Virgin 777 is my clear favourite aircraft for USA trips. But this means a domestic flight to Sydney. Even if I avoid the 737 Max when I book, Virgin can change my domestic flight number or the aircraft for that flight number between when I book and when I fly. I am about to start booking my 2020 USA trips. How much risk am I taking that I will end up on a 737 Max? And will I be able to change if I get put on the 737 Max.
Most holiday passengers often do not know what plane model they are booked on, much less care, except maybe know that the A 380 is a popular choice. Business travellers are different, they care, they network and generally do have a preference. If a couple of people in their work group or network refuses to fly the 737 Max how long is it before the rest say why am I taking the risk when I do not need to?
I wonder what affect it will have on Virgins hard won business market share by them choosing to drop the A 320 and go the 737 Max for the overall Virgin Australia group?