Montreal - Due to challenging market conditions, Air Canada does not plan to exercise options for the Boeing 787s, said Michael Rousseau, Chief Financial Officer of Air Canada.

Air Canada had firm orders for 37 Boeing 787 (8, -8 and 29, -9). Today, the Canadian flag carrier has 8, 787-8 and 27, 787-9 in its fleet and plans to take delivery of the last two 787-9 by the end of 2019.

Air Canada, as part of a targeted cost reduction effort, recently announced that it would spend $275 million to upgrade the cabins of 12 Airbus A330-300 in 2019-2020. These A330s will be based in Montreal and will operate international flights. The subcontractors that were chosen to modify the cabins are the Singaporean company ST Aerospace and its American subsidiary VT San Antonio Aerospace.

The agreement will provide Air Canada an unmatched quality solution for its A330-300 cabin reconfiguration and maintenance needs thanks to ST Aerospace's extensive and proven capabilities in this area,
ST Aerospace said in a statement.

Air Canada executives, who say they are quite satisfied with the Dreamliner, have considered before to exercise 787 options to meet the long-term demand, but have finally opted for the cheaper rental of four A330-300 in addition to the cabin improvement of its existing 8, A330-300.