Virgin Australia to lease more 737s

[Must...Fly!]

I doubt it will be a significant reversal because VA2 have confirmed several times they are not really interested in targeting medium / large businesses anyway. They have a new target market and will probably stick to focussing on them.

I just feel like, if not now, then eventually the low hanging fruit will be too hard to ignore. I'm not saying the product will change much. The decision to retain lounges in most capital cities is clearly keeping options open.

 

[AustraliaPoochie]

Who knows, maybe they prefer to pay lease charges on the 737s, rather than paying money to buy.
And if operational needs change, they can always hand the aircrafts back to the owners, rather than trying to sell them off.
Easier also if Bain decide, as some on here speculate, down the track, that they might find it easier to shut down.
And maybe the 737s lease fees are less than cost of buying, with lease payments being more economical than the cost of depreciation.
Leasing also means that VA2 does not bear the cost of ownership of aircrafts, ie, they pay an agreed lease fee, so no/not much maintenance charges.
I can see why they have downgraded that little bit, ie, to go all 737s, though of course we did love the 330 they had, and the 777s.
Overall, its all to do with what the new owner wants.
Probably not what PS/JB had in mind.
Mid range, buzz word for lower costings overall.
Compared to VA1, its all lean runnings now.

 

[jase05]

I doubt it will be a significant reversal because VA2 have confirmed several times they are not really interested in targeting medium / large businesses anyway. They have a new target market and will probably stick to focussing on them.

Agree. Small price sensitive businesses will possibly be attracted to VA but medium to large businesses that aren’t price conscious probably aren’t too fussed about being swindled double.

 

[BNEFlyer]

Agree. Small price sensitive businesses will possibly be attracted to VA but medium to large businesses that aren’t price conscious probably aren’t too fussed about being swindled double.

I work for a large international financial corporation, we have a BFOD policy. One of my managers flew Rex last week (which was a bit of a s**t show at check-in from what they told me).

 

[HS-TQE]

Who knows, maybe they prefer to pay lease charges on the 737s, rather than paying money to buy.
And if operational needs change, they can always hand the aircrafts back to the owners, rather than trying to sell them off.
Easier also if Bain decide, as some on here speculate, down the track, that they might find it easier to shut down.
And maybe the 737s lease fees are less than cost of buying, with lease payments being more economical than the cost of depreciation.
Leasing also means that VA2 does not bear the cost of ownership of aircrafts, ie, they pay an agreed lease fee, so no/not much maintenance charges.
I can see why they have downgraded that little bit, ie, to go all 737s, though of course we did love the 330 they had, and the 777s.
Overall, its all to do with what the new owner wants.
Probably not what PS/JB had in mind.
Mid range, buzz word for lower costings overall.
Compared to VA1, its all lean runnings now.

I would assume that's the case in regards to Bain. Especially after they had found out the previous owners of EY/SQ/et al had already mortgaged (asset-stripped) the entire 'owned' 737 and 777 fleets by borrowing heavily against them.

Bain stoppped paying the mortgages on the older 'owned' 737s and owned 777s and had handed them to the banks as the encumbering financiers. I would assume Bain may (or may not) have negotiated the mortgage rate on the remaining 'owned' 737s, whilst preferring to lease (back) extra 737s for expansion.

If VA does eventually expand back in Long Haul for the medium term before Bain 'exits', it's likely those WBs will be either leased or under a mortgage arrangement (e.g QF mortgaging the entire 787 fleet)

 

[AIRwin]

As mentioned in the earlier thread on this topic, it's more likely the 'new' planes heading to VA 3.0 are actually the old VA 2.0 planes they're 'getting back' from the lessors at a 'cheaper rate'.

Spotted 2-VYFQ (formerly VH-YFQ) back in BNE today...

 

[Saab34]

They now lease ‘power by the hour’ or whatever it’s called. They only pay when they fly.

 

[AIRwin]

VA will add another 9 B737-800NG aircraft from October in preparation for an expected increase in domestic travel as vaccination rates rise and interstate borders open:

Virgin Australia finalises new agreements for Nine Boeing 737-800 NG aircraft

BRISBANE, 27 August 2021: Virgin Australia will introduce nine additional Boeing 737-800 aircraft into its mainline fleet from October this year in preparation for an expected increase in domestic

newsroom.virginaustralia.com

 

[HS-TQE]

They now lease ‘power by the hour’ or whatever it’s called. They only pay when they fly.

IIRC, the 'Power by the Hour' was only the case with the 'last batch' of deliveries/returns - which is about 9x 738s.

The other 738s (Assuming this includes the recently announced next batch from Late 2021-early 2022) are under standard lease agreements with their lessors or in the case of the former owned fleet, under a mortgage arrangement with the banks.

 

[Bagpuss]

VA will add another 9 B737-800NG aircraft from October in preparation for an expected increase in domestic travel as vaccination rates rise and interstate borders open:

Virgin Australia finalises new agreements for Nine Boeing 737-800 NG aircraft

BRISBANE, 27 August 2021: Virgin Australia will introduce nine additional Boeing 737-800 aircraft into its mainline fleet from October this year in preparation for an expected increase in domestic

newsroom.virginaustralia.com

Does anyone know Is this in addition to the 10 annouced in April? .. Virgin Australia Group outlines growth plans to support tourism recovery

Or is it an additional 9 aircraft OR did they take some of the 10 announced in April and this is the final 9 (seems from this thread they took at least one of the original 10)?

EDIT: I think they took 3 of the original 10 and this is an extra 9. So 12 in total.

From the April announcement:
The Company has finalised arrangements to re-introduce 10 Boeing 737-800 aircraft which had previously been operated by Virgin Australia, with further aircraft under investigation. The first three aircraft will join the airline’s mainline fleet this month while the remainder are set to progressively enter service by October.

 

[BNEFlyer]

Does anyone know Is this in addition to the 10 annouced in April? .. Virgin Australia Group outlines growth plans to support tourism recovery

Or is it an additional 9 aircraft OR did they take some of the 10 announced in April and this is the final 9 (seems from this thread they took at least one of the original 10)?

EDIT: I think they took 3 of the original 10 and this is an extra 9. So 12 in total.

From the April announcement:
The Company has finalised arrangements to re-introduce 10 Boeing 737-800 aircraft which had previously been operated by Virgin Australia, with further aircraft under investigation. The first three aircraft will join the airline’s mainline fleet this month while the remainder are set to progressively enter service by October.

They're also getting some non-ex-VA 737-800's too.

 

[N860CR]

I believe this announcement is for additional aircraft that are coming from outside the group (ie: not just old VA aircraft being returned)

 

[Carrots]

Interesting to hear that some are likely to be non ex VA planes. No doubt there's an additional cost to those birds given internal layouts and paint.

Could it be they see a need for similar (or higher) 737 fleet numbers to previous given increased frequencies on some of the routes previously serviced in part by the A330s?

 

[Must...Fly!]

It could just be that these are newer aircraft left behind by other carriers due to the disaster of COVID. The graph mentions nothing about what happens after March 2022. Perhaps the older aircraft are coming up to lease expiry then and now is the time to strike for bargain lease rates. Just guessing!

 

[AIRwin]

Could it be they see a need for similar (or higher) 737 fleet numbers to previous given increased frequencies on some of the routes previously serviced in part by the A330s?

But that had been mostly PER whose borders may be PERmanently shut...

 

[HS-TQE]

It could just be that these are newer aircraft left behind by other carriers due to the disaster of COVID. The graph mentions nothing about what happens after March 2022. Perhaps the older aircraft are coming up to lease expiry then and now is the time to strike for bargain lease rates. Just guessing!

I'd say most likely Bain will let the lease run out on the older aircraft, if we go by recent history of Bain offloading the oldest 738s to ZL and handing off the oldest mortgaged (formerly owned) 738s to the banks.

 

[Bagpuss]

Interesting to hear that some are likely to be non ex VA planes. No doubt there's an additional cost to those birds given internal layouts and paint.

Could it be they see a need for similar (or higher) 737 fleet numbers to previous given increased frequencies on some of the routes previously serviced in part by the A330s?

Thought that may have been the case as the press release had the note at the bottom:

Notes to Editor:

• The nine Boeing 737-800 NG aircraft have specifications that are compatible with Virgin Australia’s existing fleet.

I wouldn't be surprised if there's a lack of interest for the 737-800NG with the MAX. Though at one point (pre-pandemic) I thought the -800NG would have been a premium aircraft whilst the MAX issues were resolved and confidence restored.

 

[twinaisle]

The non VA 737 are coming from silk air

 

[AIRwin]

The non VA 737 are coming from silk air

Looks like MI used to have 3 business class rows:

SeatGuru Seat Map Silkair

For your next Silkair flight, use this seating chart to get the most comfortable seats, legroom, and recline on .

seatguru.com

 

[twinaisle]

Yeah they are. Will be the BSI variants which are arriving from next week apparently.

They may or may not refit the interior l. They will be painted.in VA livery.