International Airlines Group (IAG) (IAG) will order 50 new Boeing 737 MAX aircraft with options for another 100, partly firming up plans for a tentative order announced back in 2019.
The agreement will see IAG order 25 Boeing 737-8200 aircraft, and 25 Boeing 737-10. It includes options for a further 100 aircraft. The Boeing narrowbodies will be available to its group airlines, which include British Airways, Iberia, Aer Lingus, and Vueling.
IAG surprised the industry by signing a letter of intent (LoI) for 200 MAX aircraft at the Paris Air Show in 2019. The LoI represented a show of confidence in the MAX after the Lion Air and Ethiopian Airline crashes in 2018 and 2019, which killed 346 people and resulted in the grounding of the narrowbody jet.
“The addition of new Boeing 737s is an important part of IAG´s shorthaul fleet renewal,” IAG chief executive Luis Gallego commented in a statement on May 19, 2022. “These latest generation aircraft are more fuel efficient than those they will replace and in line with our commitment to achieving net zero carbon emissions by 2050.”
The new Boeing aircraft will be delivered between 2023 and 2027 and “can be used by any airline in the Group for fleet replacement”, IAG said in a stock exchange filing. The options are available for delivery between 2025 and 2028.
The order will come as a big boost for Boeing, especially after a report that China Southern is removing over 100 MAX jets from its near-term delivery plan. The MAX remains grounded in China.
Read More: China Southern removes over 100 Boeing MAX jets from delivery plan: report
“Today’s agreement for up to 150 airplanes, including 100 options, is a welcome addition of the 737 to IAG´s short-haul fleets and reflects our commitment to support the Group’s continued network recovery and future growth with Boeing’s unrivalled family of airplanes,” Stan Deal, president and CEO of Boeing Commercial Airplanes, commented in a Boeing press release.
IAG said it had negotiated “a substantial discount” from the list prices of the jets. The 737-8200 has a list price of approximately $120 million and the B737‐10 of US$130 million. Airlines and lessors typically negotiate discounts to list prices.
The 737-8200 is the same MAX as ordered by Ryanair, while the 737-10 is the largest variant of the MAX, seating up to 230 passengers.
Ryanair had been in talks with Boeing to order the 737-10 but ended negotiations in 2021 over pricing differences. Although Ryanair has taken more MAX deliveries than initially planned this summer, Michael O’Leary said during a results presentation on May 16, 2022, that Boeing needed to “up its game” and fight back to win market share.