Air Canada anticipates no changes to 787 delivery schedule

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Boeing has not indicated to Air Canada that it should anticipate any changes in its 787 delivery schedule since issues with the aircraft's lithium-ion battery came to light, the carrier told analysts during an earnings call on 7 February.

The Montreal-based flag carrier says it has confidence in Boeing to resolve the issue and that it believes the 787 is a "great airplane".

Air Canada plans to receive its first of 37 787-8s in 2014, with seven in its fleet by the end of that year. The airline is slated to receive five more in 2015 and to take delivery of the remaining orders by 2019. It also has 13 options and purchase rights for 10 more.

The 787 is an integral piece of Air Canada's fleet restructuring strategy going forward, and induction of the aircraft plays a key role in the timeline for transitioning aircraft from its mainline operation to its low-cost Rouge leisure carrier.

Although Air Canada says that it is confident in Boeing's ability to resolve the 787 issues and did not communicate any indication of fleet plan changes, the carrier acknowledges the importance of the aircraft type to restructuring its fleet and the significant impact any potential delivery changes could have on its operation.

"A delay or failure in the completion of Air Canada's fleet restructuring, including further delays by the manufacturers in the delivery of the widebody aircraft, or an inability to remove, as planned, certain aircraft from the fleet in coordination with the planned entry into service of new aircraft, could adversely affect the implementation of Air Canada's business plan which may, in turn, have a material adverse effect on Air Canada, its business, results from operations and financial condition," says a management analysis released with the airline's fourth quarter earnings.

Air Canada's Rouge is scheduled to begin operations in July with two Boeing 767-300ER aircraft and two Airbus A319s. The carrier has said that Rouge could operate up to 20 767-300ERs and 30 A319s as new 787s enter the fleet and allow older widebodies to be transitioned to the leisure fleet.

Air Canada is also planning to launch a revamped inflight product in conjunction with the 787 deliveries and expects to see cost savings from from maintenance, fuel and operations by incorporating the aircraft into its fleet.

The 787 fleet was grounded on 16 January after two battery failures. The US Federal Aviation Administration (FAA) approved a special ferry flight on 7 February for the aircraft, but commercial flights remain grounded. The National Transportation Safety Board (NTSB) said that it could take weeks before the root cause for the issue is found on 6 February.