Australia's Virgin Blue has inked a deal for 50 Boeing 737s as part of its fleet renewal plan over the next decade.

The agreement, which was negotiated over nine months, includes 50 firm orders for 737-800NG aircraft with the flexibility to convert those to either 737-700s or 737-900s. There are options for an additional 25 aircraft with firm delivery positions, and 30 future purchase rights.

Virgin Blue did not put a value on the order, the largest in its 10-year history and Boeing's largest in the last 18 months.

Delivery will be from June 2011 to 2017, says Virgin Blue. Most of the aircraft will replace its existing narrowbody fleet, while the remainder will be used on new routes and to boost frequency on services where there is high demand.

Virgin Blue's existing narrowbody fleet comprises 50 737-700/800 aircraft (below), and it also operates 21 Embraer E170 and E190 regional jets, according to Flightglobal's ACAS database.

Virgin Blue 737 final

The delivery options will help it to manage its aircraft fleet according to market conditions, ensure that its market share is not eroded and provide additional growth according to its discretion, says the carrier.

"Virgin Blue was fortunate to see the opportunity and be in a position to take advantage of the downturn in the market, as we did back in 2001, to secure long term future supply of aircraft on attractive commercial terms," says CEO Brett Godfrey.

"Pricing cannot be disclosed but importantly net pricing is improved from 2001 levels, allowing for a lowering of the fleet's cost base. We expect to finalise our funding arrangements for these aircraft shortly."

He adds that the agreement puts the carrier in a "strong position" to prepare for growth as domestic and short haul markets recover.

"It will also ensure a turnover of aircraft to maintain the youngest fleet of modern aircraft, which is crucial for maintaining our commitment to on-time performance and the lowest cost base possible," says Godfrey.

The deal includes aircraft with the latest technology under the Boeing Performance Improvement Plan, which would help Virgin Blue reduce its carbon footprint via initiatives including engine improvement and enhanced aerodynamics.

The aircraft will have Boeing's new sky interiors with inclusions such as newly designed seats and in-flight entertainment [IFE]. They will come in the three-class configuration that the carrier is rolling out from 2011.

Source: Air Transport Intelligence news