Air Canada details plan for renewing narrowbody fleet

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Air Canada will wait several years before introducing new narrowbody aircraft into its fleet as part of an order it is negotiating with major airframers, says the carrier’s executive vice-president and chief financial officer Michael Rousseau while addressing investors today at the CIBC World Markets Eastern Institutional Investor Conference in Montreal.

“The commitments would not begin until late, late this decade,” says Rousseau. “We’re going to sort of follow the strategy of pushing our [A]320s out until they basically have no life left on them, which is a good asset return strategy from our perspective,” he says.

Rousseau continues: “Because [A]320s and [A]319s for the most part, when they come up for lease renewals, are much cheaper than alternatives at this point in time given the entry of the 320neo and the fact there’s a bit of a glut on the market for 319s right now.”

Air Canada is in discussions with Airbus, Boeing, Embraer and Bombardier as well as the major engine manufacturers about purchasing aircraft to replace the narrowbody fleet. The deal will encompass replacements for A320s and A321s for the most part, says Rousseau.

The airline still plans to finalise a decision on the narrowbody order by the end of the year as it has communicated in recent months, he says.

How many aircraft Air Canada will order remains to be seen. In June, Air Canada's chief executive Calin Rovinescu told Flightglobal that the order could be between 60 and 90 aircraft depending on the manufacturer. These aircraft that will be replaced average about 20 years old, he said.

Air Canada plans to end 2013 with 10 Airbus A321s, 41 A320s and 30 319s, a fleet plan submitted with second quarter regulatory filings shows. This represents eight fewer A319s compared to a year earlier. Air Canada will transition the aircraft from its mainline fleet to its new leisure carrier, Rouge. It also flies 45 Embraer 190 regional jets.

Canada's other major carrier, WestJet, chose the Boeing 737 Max to replace its ageing fleet in late August in a pending deal expected to be firmed by the end of the month. The agreement includes orders for 40 737 Max 8 and 25 Max 7 aircraft for delivery from 2017 as well as rights to substitute those models for the Max 9.