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British Airways parent IAG confirms massive Boeing 737 MAX order

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Three years ago, IAG, the parent of British Airways, Iberia and Aer Lingus, and Boeing agreed a huge order for the 737 MAX which, at the time, was still grounded following the loss of two Lion Air and Ethiopian Airlines flights.

It was widely assumed that the order was one of opportunism. With the aircraft’s reputation at rock bottom the prices that IAG negotiated were expected to be significantly lower than you would otherwise find.

Boeing 737 MAX scimitar wingtip

This was the same opportunism that led Ryanair to order 150 Boeing 737-800s in 2002. Ryanair called it the ‘deal of the century’.

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, Ryanair’s CEO turned up.

Deal or no deal?

Back to IAG. The order, announced at the Paris Air Show, was only a Letter of Intent. In other words, both parties could walk away from the deal with little or no penalty.

This was especially prescient given the collapse in air traffic that followed in 2020 as a result of Covid-19. It was unclear whether IAG was serious about taking deliveries of 737s or just using it as a tool to negotiate a better deal with Airbus for its A320s, which has become the backbone of the short haul fleet across all the IAG airlines. British Airways retired its last 737 in 2015, after a slow phase out in favour of A320s.

Boeing 737 MAX

Once covid took hold it seemed even more likely that IAG would ditch the order. This will not be the case, however, as Boeing and IAG have just announced they are firming the order for 50 aircraft plus 100 options.

This is slightly less than the original 200 aircraft proposed in the letter of intent, but it is still substantial. IAG will be giving up all the efficiency savings of a unified short haul fleet which will include training a separate fleet of pilots and cabin crew to operate the type as well as all the parts and spares it needs to maintain two narrow body types.

We have no idea how much IAG has agreed to pay for the Boeing 737 MAX aircraft. The list price is between $120 million and $130 million per aircraft, but as with all airline orders the exact figures are not publicly available. IAG says it has “negotiated a substantial discount from the list price” so we can probably assume it is paying around half that figure.

Fundamentally, it needs to be cheap enough for BA, Iberia and the other airlines to give up on their long term strategy of focusing on Airbus for the short haul fleet to make it worthwhile.

British Airways A320

Will we see 737s at British Airways again?

Of the firm order, 25 aircraft will be the largest 737 type, the 737 MAX 10 whilst the remaining 25 are for the smaller 737-8-200. IAG has not specified which airlines will take the aircraft, only that they “can be used by any airline in the Group for fleet replacement.”

This is intriguing because the 737-8-200 is the special ‘Ryanair variant’. This is a version of the mid-size 737-8 configured for high density. It features an extra pair of exit doors to satisfy evacuation rules and enable airlines to fit it out with 197 seats.

It is unlikely that we see this ultra-high density aircraft at British Airways, even as part of its Euroflyer fleet from Gatwick. They are likely to be destined for Vueling, the Spanish low-cost carrier.

Whether British Airways takes delivery of any of the 737-10s remains to be seen. Its A319 fleet has an average age of over 20 years and will need replacing soon. The 737-10 could be a good fit – British Airways, like most airlines, is gradually up-gauging its fleet as air traffic grows, and the A319neo is the least popular aircraft in the A320 family, with just 72 out of a total 8,078.

From a customer experience perspective, I would prefer it if BA did not take any 737 MAXs. Whilst I have yet to fly a MAX, the fundamental geometry of the fuselage means it will always be narrower than an A320, leading to slightly narrower seats and aisle. It may be a small difference but it’s one I can’t help but notice when I board a 737.

The aircraft will be delivered between 2023 and 2027.

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How to earn Avios from UK credit cards (June 2022)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

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You qualify for the bonus on these cards even if you have a British Airways American Express card:

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Comments (121)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Jonathan says:

    From a business class seat perspective, why can’t all the likes of BA get CE seats that closely resemble JetBlue’s Mint seats ?

    I know that BA use their A320s on routes that around 5 hours long, and the CE seat is essentially an ET seat with the middle seat blocked, which hardly makes the CE seats value for money (or Avios !

    • Rhys says:

      None of the European airlines do.

      • Max says:

        Aeroflot and Turkish do!

      • Nick says:

        Last week I flew to Germany on an aircraft with 3 rows of CE. The same aircraft had just come from the Canaries with 12 rows of CE. If they had bigger seats of the armchair/mint-style, that kind of flexible operation would be impossible.

        The big difference in Europe is that the majority of business is sold as such. In the US, at least half is FFP upgrades, mainly processed at the gate, so they don’t have the same kind of flexible curtain requirement.

        • Rob says:

          The US airlines are doing a lot better at selling business class these days, with aggressive discounting and targeted upgrade cash offers (which BA has also tried of course). They have finally realised that getting some cash is better than no cash.

          • marcw says:

            Well, “getting some cash” is better than upgrading for *free* a frequent traveller. But that’s not the case in Europe.

          • Rui N. says:

            @marcw, they sell then first, then upgrade for free. Thus Rob’s comment about getting some cash.

          • marcw says:

            @Rui N. Yes, that’s what I mean. It’s better to get a few $ instead of upgrading for free.
            But European airlines don’t follow the same business model.

    • Londonsteve says:

      I could reluctantly accept ET seats with the middle seat blocked if, as they used to, they offered materially more legroom in CE compared to ET. Surely this is something that the taller amongst us would appreciate to the point that some people would actually pay for CE purely because they can fit in the seat! The old configuration created the happy byproduct that status holders could book larger legroom seats in front of the emergency exit rows in ET as a small but meaningful perk of having status.

      • Rich says:

        I flew back from Valencia earlier this week on a BA flight operated by Finnair – the extra leg room in row 2 v BA metal was noticeable and much appreciated as I’m 6’7” and normally have to sit sideways in CE if I can’t get row 1. I’ve not checked if this is true of the whole A321 we flew or whether it’s just the front x no. rows but it brought back pleasant memories of the old CE.

        • Londonsteve says:

          I rather wish BA would subcontract their entire short haul operation to Finnair and Qatar and be done with…. No need to try to recruit staff in London for a derisory £16k per year.

  • Sean says:

    No containers means no cargo and extended times to load. Must have been a good deal.

  • Matthew says:

    I won’t be flying on them. Nasty plane well past its use by date. Avoid KLM as most likely to find a 737 on one leg or another. I always choose airbus airlines first. Also very concerned about their safety. Should have binned the design. One more tragedy and they are scrap value only. Boeing should look to revamp the 757 that was a great plane.

    • Tim says:

      Yes the most successful aircraft ever built, that flies millions of safe sectors a week in every corner of the world, is unsafe…

      • Silverwings says:

        I wont fly it – not because it is not safe but because it is uncomfortable… the A320 type wins the comfort battle hands down.

      • Mike says:

        They took the most successful aircraft ever built and stretched the design past breaking point creating an unstable plane requiring computer interventions that went horribly wrong.

      • JerrySignfield says:

        Clearly he’s talking about the Max but you already knew that

    • Jonathan says:

      A nearly forgotten plane along the 717 (probably for most HfP readers), unless you take a lot of domestic routes with Delta then there’s a chance you’ll be flown on the latter

    • Panda Mick says:

      The 757 was based on the 737… 🙂

  • Steven C says:

    Lets hope they can get the staff to operate them!

    • NigelthePensionerr says:

      Never mind fly them but also operate the airline as a whole!!

  • Richie says:

    I’ve experienced the MAX. They’ve installed ‘push up’ overhead lockers and too many passengers over fill them so they can’t be pushed up. The crew have to spend too much time sorting issues out and pushing up again before take off. Closing lids is much simpler.

  • Andrew. says:

    Well, that’s one way to wean me off of domestic flights from Heathrow and to take Lumo or LNER instead.

    • lumma says:

      Lumo? The most uncomfortable way to travel from Newcastle to London?

  • Save East Coast Rewards says:

    OT but BA related. I opened the BA Exec Club app (the one that links to the Avios shop portal) and there was a mention of a BA prepaid Mastercard with 1 Avios for every pound, euro or US dollar spent. No fee for 6 months and then £2.99 thereafter.

    I’ve not heard of this before. Is there a HfP article about it (or will there be)? I wonder if it appears for me because I’m still based on Italy so the Barclaycard and Amex aren’t available. But as they quote the monthly fee in pounds I assume it must be available in the UK too.

  • George K says:

    For those wanting to get a BA 737 experience in the meantime, the CPT-JNB route is still done by BA-liveried 737-800s 🙂

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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