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Virgin Blue goes shopping and spends a billion!
Virgin Blue has announced that it is going for a Brazilian by ordering up to 20 Embraer Brazilian built E-Jets worth $950 million retail value, but anticpated to be for less, to drive its expansion in domestic and regional markets.
Acquiring the eleven 98 to 114 seat Embraer 190s and the three 70 to 80 seat 170s with an option for six additional jets, moves Virgin Blue away from a core principle of their business in only operating one type of aircraft with the associated significant maintenance and operation and costs savings driven by the operation of its one type Boeing 737 fleet.
The Embraer order though does give the carrier additional flexibility to match capacity to demand as well greater efficiency and the ability to service thinner routes in regional markets, for which the 737 was not suitable or profitable.
Deliveries are scheduled to start next year and Virgin Blue says the aircraft will feature “elite” leather seats that are the world’s widest in a single-aisle aircraft in 2×2 configuration, which means there is no middle seat.
The Embraer 190 has a range of 4260kms, enabling it to fly anywhere in Australia as well as to New Zealand and the Pacific with a full payload, with the smaller 170 able to operate from Sydney to anywhere on the Eastern seaboard, as far north as Darwin, as well as to New Zealand and some part so the Pacific.
It is anticipated that the delivery of the Embraers will see Virgin Blue go back on to the Canberra route in addition to going head to head on some very profitable regional routes with QantasLink, rex, Skywest and others with an ensuing price war a possibility.
Report by The Mole
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