British Airways owner IAG agreed to buy 50 737 MAX jets from Boeing, giving a lift to the beleaguered U.S. company and concluding a widely watched commitment for 200 aircraft originally agreed three years ago.
The jets, which include 25 high-capacity MAX 200s and 25 as-yet-uncertified MAX 10s, can be used by any airline in the group for fleet replacement and will be delivered starting next year, London-based IAG said. The order includes options for another 100 planes, to be available between 2025 and 2028.
Although smaller than IAG’s provisional deal from 2019, the order nevertheless provides a boost for Boeing’s workhorse single-aisle jetliner, which was grounded for almost two years after two fatal crashes. It’s also a shot in the arm for Boeing after a number of customers, including Australia’s Qantas and Air France-KLM, placed orders with archrival Airbus.
The 2019 deal was widely seen as a lifeline to Boeing by former IAG CEO Willie Walsh at a time when Boeing was at its most vulnerable. Airbus vowed to contest the order and retain IAG.
Boeing management has come under attack from previously loyal customers. On Monday, Ryanair Holdings, Europe’s biggest discounter and an exclusive Boeing customer, said the commercial aircraft business was in dire need of an overhaul. In an expletive-laden investor call, Michael O’Leary, the carrier’s CEO, said executives were “running around like headless chickens,” both struggling to sell planes and failing to deliver those they have sold.
That followed a rare rebuke by the heads of Air Lease Corp. and Avolon, another airplane leasing company, asking for changes in management.
Boeing now has production snags afflicting its three main jetliner models. Deliveries of the 787 Dreamliner composite widebody model have been halted for almost a year because of quality defects, while the 777X now won’t arrive until 2025, five years later than expected.
The initial 50 jets ordered by IAG have a list price of about $6 billion, but the aviation company said it had negotiated a “substantial discount.”
IAG, which also owns Spanish flag carrier Iberia and discount-airline Vueling, now only operates Airbus planes on its mainline short-haul network.
“The addition of new Boeing 737s is an important part of IAG´s short-haul fleet renewal,” Chief Executive Officer Luis Gallego said in a statement.