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Travel industry news

18 Jun 2019

BY James Chapple

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British Airways owner signs letter of intent for 200 Boeing 737 Max

British Airways owner IAG has signed a letter of intent with a view to ordering 200 Boeing 737 Max aircraft in a deal with that would be worth more than $24 billion at list price.

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British Airways owner signs letter of intent for 200 Boeing 737 Max

Negotiations were firmed up at the Paris Air Show on Tuesday (18 June), with Boeing stating IAG was looking to “build its future fleet” around the economical and fuel efficient 737 Max.


The aircraft is currently grounded following two fatal crashes in five months, Lion Air flight 610 in October last year and Ethiopian Airlines flight 302 in March.


Boeing is working on a software update for a deep-seated control system preliminary investigations suggest was active when both aircraft crashed.


IAG, parent company of British Airways, Aer Lingus, Iberia, Vueling and Level, primarily operates Airbus single-aisle aircraft, mainly Airbus A320s.


However, chief executive Willie Walsh said the group would consider a switch to the 737 Max for its future fleet “to spur competition”.


"We’re very pleased to sign this letter of intent with Boeing and are certain these aircraft will be a great addition to IAG’s short-haul fleet," said Walsh.


"We have every confidence in Boeing and expect the aircraft will make a successful return to service in the coming months having received approval from the regulators."


IAG’s order will be for a mix of 737 Max 8 aircraft seating up to 178 passengers in a two-class configuration, and the larger 737 Max 10, which can accommodate up to 230 passengers.


While no split has been divulged, Boeing said in a statement IAG would look to deploy the short-haul aircraft across the group’s airlines.


Kevin McAllister, Boeing president and chief executive commercial airplanes, said the manufacturer was “honoured and humbled” by IAG’s “trust and confidence” in the 737 Max and “the people of Boeing”.


Boeing says the 737 Max is 14% more fuel efficient than its previous next-generation 737, and 20% better than the original next-generation 737.

 

IAG has also ordered 14 of Airbus’s new A321XLR (extra long-range) aircraft to further expand its single-aisle fleet.


Eight will be operated by Iberia, allowing it to operate “new transatlantic destinations and increase frequencies in key markets”.


The other six, meanwhile, will be operated by Aer Lingus, allowing it to “launch new routes beyond the US east coast and Canada”.

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