Virgin Australia strikes a deal with Boeing to restructure its Boeing 737 MAX aircraft deliveries 

Virgin Australia Holdings Limited (ASX: VAH) is a part of the Virgin Group, one of the highly respected global brands at the present time. The company belongs to the aviation sector and has a wide fleet of aircrafts for domestic and international journey.

On 30th April 2019, the company announced that it has entered into an agreement with Boeing to restructure its Boeing 737 MAX aircraft deliveries. The decision for the restructuring of the aircraft, came after the company restructured its order book.

The decision would reflect in the postponement of the delivery of its maiden Boeing 737 MAX aircraft from the previously scheduled November 2019 to July 2021. It would also result in the conversion of an additional 15 of its 737 MAX 8 aircraft on order to 737 MAX 10s.

According to the agreement, the company will receive the delivery of its initial 737 MAX 10 aircraft in 2021, with the first 737 MAX 8 planned to arrive in 2025. Further, the restructure would help the company to delay the current capital expenditure and provide an access to the superior economic benefits of the MAX 10 aircraft.

CEO and Managing Director’s statement

Mr Paul Scurrah, CEO and Managing Director of Virgin Australia stated, that he was happy with the company reaching towards the deal with Boeing. It would be able to convert a further 15 of its Boeing 737 MAX 8 aircraft to MAX 10s and postpone the delivery of its order until July 2021.

He further stated that for the company, safety was always the number one priority. The company would not introduce any new aircraft, before the complete satisfaction concerning the safety of the aircraft has been obtained. Further, the company has shown confidence in Boeing’s commitment to returning the 737 MAX to service in a safe manner.

The revised timings will lead to the positive commercial benefits for the company, which includes the delay of capital expenditure by extending the use of existing aircraft, as the company contains a relatively young age of the aircraft fleet.

According to the company, 737 MAX 10 aircraft is the ideal fleet type to meet many of the company’s commercial and market requirements. The aircraft is the largest of the entire 737 range which allows for greater capacity leading to higher operating efficiencies.

Boeing 737 recent crashes

The above-mentioned restructure of the aircraft has come after the two severe Boeing 737 MAX plane crashes (of Ethiopian Airlines and Lion Air) which killed hundreds of people in both the flights.

In October 2018, Lion Air’s Boeing 737 MAX 8 crashed and hit the water, killing 189 people onboard. Another crash was reported after a few months from Ethiopian Airlines involving Boeing 737 Max, which also killed the people onboard. The two consecutive crashes in a few months ignited a global concern regarding the manufacturing fault in the aircraft. Many aviation companies took steep measures including American Airlines, which has cancelled all Boeing 737 MAX 8 flights from June till the mid-August 2019

On 13th February 2019, the company announced 1HFY19 results in which it reported underlying PBT of $112.3 million.

Technical outlook

The market capitalisation of the company is A$1.56 billion. The 52- week high and low of the stock is A$0.25 and A$0.17 respectively. The stock last traded at a price of A$0.180, down by 2.703% compared to the previous closing of A$0.185 (as on 30th April 2019). In the last six months, the stock has delivered a negative return of 7.5%. However, in the last 5 days it has given a return of 2.78%.


This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK