Company News

Virgin Australia reduces Boeing 737 MAX order, pushes back deliveries

* Will take 25 737 MAX planes, down from 48

* First deliveries in mid-2023 rather than mid-2021

* To deploy 737 MAX 10 on high-density routes

SYDNEY, Dec 9 (Reuters) - Virgin Australia said on Wednesday it had restructured its order for Boeing Co 737 MAX planes, reducing the number on order to 25 from 48 and delaying the first deliveries by two years to mid-2023.

Australia’s second-biggest airline, now owned by U.S. private equity group Bain Capital, said in a statement it would take 25 of the largest variant, the 737 MAX 10, but not the 23 smaller 737 MAX 8s it had ordered previously.

Bain’s purchase of Virgin closed last month, allowing the airline to exit from voluntary administration, Australia’s closest equivalent to U.S. Chapter 11 bankruptcy.

Virgin has removed 777 and Airbus SE A330 widebody planes from its fleet, centring its operations around the 737 as part of an effort to cut costs as it repositions as a largely domestic mid-tier airline rather than a full-service carrier.

“The restructured agreement and changes to the delivery schedule of the Boeing 737 MAX 10 gives us the flexibility to continually review our future fleet requirements, particularly as we wait for international travel demand to return,” Virgin CEO Jayne Hrdlicka said.

She said the 737 MAX 10 would be deployed on high-density domestic and short-haul international routes.

That variant remains in development and regulators have not yet certified it. The U.S. Federal Aviation Administration last month granted Boeing approval for the smaller 737 MAX 8 and 737 MAX 9 planes to return to the skies after a 20-month grounding following two deadly crashes.

Boeing lost another 63 orders for the 737 MAX jet in November, including the Virgin reductions and the company delivered seven aircraft to customers, down from 24 in the same month a year ago, company data showed on Tuesday. (Reporting by Jamie Freed. Editing by Gerry Doyle)