Varig of Brazil has committed to a major fleet expansion, with orders and options for up to 39 Boeing 737s, 767s and 777s worth an estimated $2.9 billion. An announcement confirming the deal is expected at the show.

The most significant element is the selection of four 777-200ERs, with four options. The order, which was won after stiff competition with the Airbus A340, also represents a much needed contract for General Electric, which will supply its GE90 turbofan to power the fleet. The 777s are expected to be delivered from 2001 onwards.

Although Boeing and GE, which has also been selected for the other aircraft on order, decline to comment on the deal, the entire package is estimated to be worth almost $2 billion in firm orders and around $990 million in options. The engine maker's share is estimated at around $500 million.

The order also includes six firm CF6-80C2-powered 767-300ERs. These will be used to replace McDonnell Douglas DC-10-30s from 1999 onwards and follows a pattern already established with the current fleet of 10 767s, six of which are -300ERs. The airline is still thought to be interested in the 767-400ER, although the early delivery dates for the latest purchase suggest that this option is not being considered at present.

A large part of the deal is a further purchase of Next Generation 737s, to add to the earlier order announced last year. The latest deal includes 10 firm 737-800s and four firm -700s, with options on a further 11. Under an earlier arrangement, Varig converted its existing order for 14 737-300s into a mix of -700s and -800s. The first five -700s were expected to be delivered some time during 1999, with five -800s following in 2000.

If all orders and options are exercised, Varig's total Next Generation fleet is likely to number about 39, some seven more than the number the airline predicted in 1997. The new batch of 737s ordered in this deal are expected to be delivered from 2000.

Source: Flight International