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Big IAG aircraft orders: 200 Boeing 737 MAX and (more interestingly) 14 Airbus A321LR

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This week is the Paris Air Show, which is traditionally the place where Airbus and Boeing like to announce big new aircraft orders.

First up was the surprise ‘order’ (which it isn’t) by IAG for 200 Boeing 737 MAX aircraft.

The genesis of this order, I believe, goes back to 2002.  You need to remember that Ryanair’s Michael O’Leary and IAG CEO Willie Walsh are both Irish and know each other well.

In January 2002, Ryanair placed an order for 150 Boeing 737-800.  The airline has since described it as ‘the deal of the century’ and it has underpinned its ability to offer low fares ever since.

It was just four months since the 9/11 attacks.  Boeing had announced plans to fire 30,000 workers and was predicting that future deliveries would be just half of their historic levels for the medium term.  And then Michael O’Leary turned up.

We have no idea how much IAG has agreed to pay for the Boeing 737 MAX aircraft.  It is presumably next to nothing, in aviation terms – Boeing is likely to be losing money on the deal.

Why else would British Airways want to voluntarily let itself take all of the PR flack that has come its way in the last 24 hours?  More strategically, why would BA want to give up on its long term strategy of focusing on Airbus for its short haul fleet?

Importantly, this is not a firm order.   It is a ‘letter of intent’ with an agreed price should the order be confirmed.  It is possible that Willie Walsh will be popping over to Airbus soon and saying that they can have the order if they match the price.

In total, IAG has fixed a price for 200 Boeing 737 MAX.  These will be used at London Gatwick for British Airways and across Europe for LEVEL and Vueling.

Delivery is expected between 2023 and 2027, with a mix of MAX 8 and the larger MAX 10.

Boeing 737 MAX

And 14 Airbus 321XLR aircraft too ….

More interesting, from a strategic point of view, is the decision by IAG to purchase 14 Airbus A321XLR aircraft.

Six of these will go to Aer Lingus with the remaining eight to Iberia.

If the aircraft are a success, IAG has an option for a further 14 aircraft.

We have covered, quite extensively, the plans by Aer Lingus to hugely expand its ‘single aisle’ flights to the Eastern coast of the United States.  This will use a new fleet of eight Airbus A321neo LR aircraft, the first of which is due for delivery any time now.

The XLR is a further development of the LR.  It has an astonishing range for a single-aisle aircraft of 4,700 nautical miles.  This means that the US West Coast is now within reach.

From 2023, when the first of these aircraft arrive, Aer Lingus will be able to fly to a huge number of cities in North America.  As these aircraft have a relatively small – and so easier to fill – passenger capacity compared to an Airbus A350 or similar, they will make many more routes financially viable.

It is less clear what Iberia will do with its fleet, but there are many major gaps in its long haul network which can hopefully now be filled.

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Comments (49)

  • Josh says:

    OT but related to the BA 500 avios statement credit, does anyone know if this is done on a cumulative basis?

    I booked some reward flights with a companion voucher but the taxes have come through as two lots of £450 so just below the threshold, usually the amex offers seem cumulative but I can’t see on the T&C’s if this is the case for this one.

    • Rob says:

      Usually are.

      • Josh says:

        Hi Rob, how exactly would that work with the offer as it states “Spend £500 & get 500 Avios up to 3x”, would a cumulative £1,500 get you the 1,500 avios or if it was in <£500 chunks would you get zero?

  • Dev says:

    If WWW (Wee Willie Walsh, as he is known) got his way with Boeing, then he also got a further discount on the price for the B777X on order for British Airways.

  • the_real_a says:

    Well it wasn’t long ago that the 787 was “spontaneously combusting”, now nobody gives a second thought…

    Airbus aircraft have 3 angle of attack sensors, with the computers taking the “best of three” when one disagrees. The facts about the MAX issues are staggering – it has a single sensor that would plough the aircraft into the ground when it was faulty in certain situations. More over crew were not even informed of its existence. The solution being worked on as i understand it is to install a second sensor and then “disengage” the protection if one disagrees. I’m perplexed how it ever got certified in the original state. Its as if they haven’t learnt any lessons from Airbus automation issues over the last 30 years.

    • Shoestring says:

      No need to be perplexed, Boeing has the FAA eating out of its hand, simple

    • Thomas Howard says:

      The pilots are still thinking about them bursting into flames: https://www.theguardian.com/business/2019/jun/15/boeing-dreamliner-b787-safety-fears
      However, I’d still fly a 787 but would sooner walk than get on a 737MAX.

      • Charlieface says:

        I always worried that since the batteries are in the tail they might explode in a tailstrike. But then you rarely hear of the tail being punctured in a tailstrike so maybe it’s not such a risk. Either way, lithium ion batteries are scary, they are unstable and usually explode at high temperature or pressure or in the case of puncture.

    • john says:

      There are two sensors infact, but they didn’t feel the need to verify the data from the sensor being used with the second sensor!

      • Chrisasaurus says:

        It isn’t that simple, they would never agree , even in straight and level flight let alone in a climb and bank which is a part of the envelope for which MCAS was intended. So you need some intelligent data processing- a computer- and thus more complexity

        Plus don’t forget the Airbus a320 that crashed since two aoa sensors failed and so the inertial reference unit decided to vote out the only good data…

  • @mkcol says:

    I’ve seen interesting comment in a few places that IAG actually referred to the LOI being for 737-8 & 737-10 aircraft with no mention of MAX.

    IIRC 737-8/-10 are the correct designators for the aircraft, it’s just that MAX has been chucked in there somewhere along the line – marketing?

    Anyhoo – are we about to see it increasingly referred to as the 737-8/-9/10 etc especially once it’s all fixed to help further disassociate it from the crashes?

  • Phil Duncan says:

    IAG intend to order an aircraft with a built in design flaw that has caused two crashes but then they were cheap so that’s OK. What a crazy world we live in.

  • RN says:

    Would not dream of flying on the MAX’s myself. Completely accept that mistakes happen, but the way in which Boeing have responded to the issue is what kills my trust.