July 17, 2018 / 1:23 PM / a year ago

RPT-TUI likely to plump for larger variant of 737 MAX plane

(Repeats to add Reuters Instrument Codes)

FARNBOROUGH, England, July 17 (Reuters) - European travel and tourism group TUI is likely to plump for the larger variant of the Boeing 737 MAX plane when it exercises options on an existing order, a board member said on Tuesday.

"Within our order we already have an amount of MAX 10 and I can see that as being more likely to increase over time," David Burling, TUI's CEO of markets and airlines, told Reuters.

TUI has a firm order for 72 737 MAX single-aisle planes with options for another 48. The first 737 MAX 10 is due to be delivered at the end of 2020.

Burling said the MAX 10 provided more seats, meaning it could be used to fly more passengers from constrained airports, where the only way to fly more people is to use bigger planes.

It also has the advantage that, despite being a single-aisle plane, it can fly from Europe to mid-haul destinations such as Egypt and Cape Verde, which are popular winter sun destinations, Burling said.

Tourism-focused airlines such as TUI often struggle to use their single-aisle aircraft fully during the European winter because fewer people holiday, meaning there isn't demand for the traditional summer destinations.

"We will move through the rollover of the options bit by bit. We won't order a huge amount in one go," he said.

Like other airlines, TUI is currently waiting to see what happens to Britain's negotiations to leave the European Union.

Burling said the group had various plans ready to be implemented, and he was comfortable given the current time frames.

"We are comfortable, given the timescale of events that the British government have indicated, that we will be able to work round any contingency. If the Brexit process goes to a completely different set of timescales I can't comment," he said.

For example, TUI can move operations from one of its airline units to another, depending on what licences are required, he said.

Britain's easyJet, for example, has set up a new Austria-based airline as a Brexit contingency, but TUI comprises airlines in Britain, Belgium, Germany among others.

Still, he said Brexit didn't seem to be affecting demand for holidays, pointing out that despite economic uncertainty in some parts of the UK economy, consumers had not cut down on travel and leisure spending. (Reporting by Victoria Bryan; Additional reporting by Sarah Young; Editing by Mark Potter)

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