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.
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.
How to earn Avios from UK credit cards (February 2024)
As a reminder, there are various ways of earning Avios points from UK credit cards. Many cards also have generous sign-up bonuses!
In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
There are two official British Airways American Express cards with attractive sign-up bonuses:
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points. These points convert at 1:1 into Avios.
Run your own business?
We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios.
You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.
There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.