Boeing (NYSE: BA ) booked a big win Wednesday, when, in an after-hours news release, Air Canada announced that it has placed 61 "firm" orders for Boeing aircraft -- and then added it has taken out "options" to buy 18 more, and "rights" to purchase 30 more.
The planes in question, which total a potential 109 aircraft, will all be from Boeing's 737 MAX line, which retail for anywhere from $85 million to nearly $110 million. Specifically, the carrier says it will definitely be buying 33 of Boeing's 737 MAX 8 aircraft, which list for $103.7 million apiece; and also 28 737 MAX 9s -- $109.9 million each at list prices. Thus, the firm part of Air Canada's order falls just shy of $6.5 billion in putative value.
The order is not quite as "firm" as it sounds, however. Air Canada qualified that it has the right to substitute lower-cost ($85.1 million each) 737 MAX 7 aircraft for these planes. As for the "options" and "rights" to buy additional aircraft, Air Canada did not specify to which precise variants of the 737 MAX these pertain.
Deliveries are to begin slowly in 2017, accelerate into 2018, 2019, and 2020, and then conclude in 2021.
As part of the deal, Air Canada secured a commitment from Boeing to buy up as many as 20 of the airline's 45 Embraer (NYSE: ERJ ) E190 aircraft. Thus it shifted the responsibility, for figuring out what to do with its unwanted Embraers, to Boeing.