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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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Comments (121)

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

  • Jay says:

    I’ve resolved to never fly on any Boeing plane ever again, how they caused and dealt with the 737 max tragedies leaves me with no confidence in their aircraft. I hope BA takes none of these death traps.

    • Novice says:


    • Dawn says:

      I did everything I could to avoid the Max and booked with Turkish airlines only on their Airbus flights. Then I boarded to go IST – Hurghada and suddenly realised I was on the Max as they’d changed planes last minute. Too late to get off. Every time it shuddered I wondered if we were on the way down! Inside the plane was lovely and the most comfortable short haul plane I’ve flown on for a very long time. But I still prefer to avoid the Max if I can.

  • David J Tough says:

    A320 Neo is a superior aircraft over the737 max.

  • Dave says:

    737 = no business from me

  • TimM says:

    The 737-MAX is inherently unstable. One computer glitch and another one will come down. Unfortunately, it will and that will be the end of the 737-MAX, and possibly the 737 by association. Much like the DC10, people will refuse to fly on them.

    Boeing and the US cartel of regulators, inspectors and Government have colluded to make a monstrosity. Lessons need to be learnt but unfortunately the disasters have to precede them.

    Boeing were way too slow to respond to Airbus’s A32x neo but did not have and airframe to compete, so it was done as a software correction instead. With the new engines, the aircraft will not fly by itself. How much do you trust the regular bug fixes to keep the plane in the air?

    Soon we will see the end of an era – the end of the 737, with the next crash.

  • john Monaghan says:

    What a big mistake Willie Walsh did this as he has a gripe with Airbus Buying this Plane is a backward step its a 60 year old design and looks it the toilets are tiny and they’ll need to retrain pilots I thought BA was a forward thinking company just think you could be putting British jobs at risk Something feels a bit dodgy here

  • Luca says:

    Yup, with so much choice a220/320 I don’t have to fly BA for the avios racket.

  • Matarredondaaa says:

    Flew a Ryanair 8200 last night and crew were very unhappy at the galley space.
    I suspect BA will stay Airbus.
    The so called legacy airlines like a balance between Airbus and Boeing as keeps them conpetive on price hence IAG buying these aircraft
    The 8200 will be very keenly priced but the Max 10 not so as Ryanair have found out as Boeing want to make a return on these. Don’t forget this model has yet to be certified and if this doesn’t happen by year end it will be classified by FAA as a different model.

    • ADS says:

      Unless Boeing persuade the FAA/US govt to change the rules – again!

  • JandeW says:

    Regardless of the outdated, cramped design of the 737, I would still be very wary of travelling on the 737 MAX. To my mind, the safety issues have never been sufficiently addressed.

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

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