MONTREAL—Air Canada plans to spend up to US$6.5 billion to buy 61 narrowbody aircraft from Boeing as it moves to update its fleet over the next decade.
The country’s largest carrier said it could expand the order to as many as 109 of Boeing’s 737 MAX planes as it replaces older Airbus and Embraer aircraft.
The order includes two sizes of Boeing 737 MAX aircraft with between 162 and 180 seats in two seating classes. It can also substitute for some 737 Max planes containing 126 seats.
Besides the 61 firm orders, Air Canada has options for 18 planes and rights to purchase an additional 30 aircraft.
Deliveries are scheduled to begin in 2017 with two planes and with the firm order to be completed in 2021.
“Renewal of our North American narrowbody fleet with more fuel efficient aircraft is a key element of our ongoing cost transformation program,” Air Canada CEO Calin Rovinescu said Wednesday after markets closed.
He said the purchase of new planes will yield a 10 per cent reduction in costs per seat as a result of lower fuel and maintenance expenses.
Air Canada’s domestic rival WestJet flies Boeing 737 planes and recently ordered several MAX aircraft.
As part of Air Canada’s order, Boeing will purchase up to 20 of the airline’s fleet of 45 Embraer E190s, which will be replaced with larger leased planes until the 737 aircraft are delivered.
The Montreal-based airline said it will also evaluate over the next six months the replacement of its 25 remaining E190 aircraft with more cost-efficient planes such as Bombardier’s 110- to 160-seat CSeries.
Bombardier spokesman Marc Duchesne confirmed Wednesday that discussions continue with Air Canada about the potential purchase of CSeries planes.
The airplane order comes as Air Canada is about to receive the first of 37 widebody Boeing 787 Dreamliners early next year.
It plans to transfer up to 50 Boeing 767 and Airbus A319s to its low-cost Rouge airline.
Air Canada said its total fleet, including Rouge but excluding aircraft flown by regional partners, is expected to grow to about 214 by the end of 2019 from 192 as of Sept. 30.
In addition to the narrowbody order, Air Canada has options and rights to purchase 10 Boeing 787 planes and 13 Boeing 777s.
“We’re honoured that Air Canada chose Boeing to lead its fleet renewal plan,” said Brad McMullen, vice-president of North America Sales for Boeing Commercial Airplanes.
The Boeing 737 MAX airplanes used CFM International LEAP-18 engines that promise to deliver a 14 per cent improvement in fuel
efficiency over the current narrowbodies in service.
Air Canada is Canada’s largest domestic and international airline serving more than 175 destinations, and is among the 20 largest airlines in the world, with almost 35 million customers.