Air Canada latest carrier to detail 787 delivery delays

Washington DC
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Boeing has told Air Canada deliveries of its first 787 will be pushed out up to 30 months, resulting in first delivery around January 2012.

Airline CEO Montie Brewer today during an earnings call told analysts the carrier has been advised by Boeing that delivery dates are being pushed out 24-30 months. Flight’s ACAS database shows Air Canada has 37 787-8s on order.

Other 787 customers have also predicted similar timeframes for slips in initial deliveries. LAN recently warned of significant delays of around two years, while Royal Jordanian expects a delay of up to 30 months.

North American launch customer Northwest Airlines is not facing as significant of delay in its first 787 delivery. The carrier expects to receive its first aircraft during the fourth quarter of 2009 instead of the original August 2008 delivery date.

Echoing similar sentiments expressed by other 787 customers, Air Canada plans to seek compensation from Boeing for the delays, says Brewer.

Responding to a question over when Air Canada might become fleet constrained due to the delays Brewer states: “We run into issues in 2010 when the first aircraft was supposed to show up.”

The chief executive says Air Canada was counting on the 787 to help the carrier mitigate higher fuel costs, but is reassured that the operator’s fleet is younger than some other 787 customers that are facing delays.

“Just imagine if we were like other carriers that haven’t brought in a new efficient fleet to weather this storm,” says Brewer.

Air Canada’s frustration over the delay of 787 deliveries is somewhat tempered by praise of its 777s. Brewer says the aircraft has not only lifted business class revenues, but “more importantly has continued to significantly lower our unit costs”.

Carrier CFO Michael Rousseau says an Air Canada 777-200 burns 15% less fuel per seat than the Airbus A340 it replaces.

Air Canada during the first quarter added four 777s to its fleet – three 777-200LRs and a single 777-300ER. Four more 777s are scheduled for delivery this year, followed by another next year. Rousseau explains Air Canada is looking at different financing options for the aircraft including sale/leasebacks and utilizing the Exim bank.

Brewer says 18 aircraft are exiting Air Canada’s fleet in 2008, including four 767-200s that were originally scheduled to operate beyond autumn. The carrier is adjusting its capacity during the second half of the year mainly through reduced frequency and down gauging, its CEO explains. He did note that Air Canada plans “late fall” service suspension to Rome and Osaka.

Freighter flights to Europe flown by Air Canada with a chartered MD-11 are scheduled to end on 30 June. The carrier says the termination of the service coincides with “increased cargo capacity being offered in Europe through greater use of new Boeing 777 passenger aircraft which have a greater cargo capacity than the Airbus aircraft they are replacing”.