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IAG Finalizes Agreement For Up To 150 Boeing 737 Aircraft

A British Airways 737 MAX in storage on the ramp. (Photo: AirlineGeeks | Katie Bailey)

International Airlines Group (IAG) has announced on Thursday that they have reached an agreement with Boeing to order 25 737-8200 and 25 737-10 aircraft. The announcement also advises that the parent group of British Airways, Iberia, Vueling, Aer Lingus and LEVEL have the option for a further 100 aircraft in the future subject to shareholder approval. Reuters reported that the total deal could be worth $6.25 billion at Boeing’s official list prices though an order of this size would certainly be subject to a discount.

Luis Gallego IAG’s chief executive said: “The addition of new Boeing 737s is an important part of IAG´s short-haul fleet renewal. These latest-generation aircraft are more fuel-efficient than those they will replace and in line with our commitment to achieving net-zero carbon emissions by 2050.”

IAG had previously placed an order for 200 Boeing 737 MAX aircraft in 2019 but that order had lapsed as a result of the coronavirus pandemic. The aircraft ordered this week are expected to be delivered between 2023 and 2027 for use across any of IAG’s airlines though the larger 737-10 variant has yet to receive certification.

According to Boeing ‘the 737-8-200 will enable IAG to configure the airplane with up to 200 seats, increasing revenue potential and reducing fuel consumption.’ The manufacturer adds that the ‘737-10 seats up to 230 passengers in a single-class configuration and can fly up to 3,300 miles. The fuel-efficient jet can cover 99 percent of single-aisle routes, including routes served by 757s.’ The Financial Times (FT) cited industry sources as saying the aircraft ‘is most suited to operations at London’s Gatwick airport that do not require containers for cargo.’

This week Ryanair Group chief executive Michael O’Leary criticized Boeing for delays in aircraft deliveries and certifications. The FT reported that Mr. O’Leary suggested that Boeing seek to replace management in the commercial aviation division to overcome the problems. The FT also reported industry sources as saying that IAG ‘continues to negotiate with Airbus for an order of roughly the same size.’ However, Lufthansa chief executive Carsten Spohr came to Boeing’s defense at a meeting in Washington on Thursday stating that “Boeing as a symbol of America will get back to its feet” and adding that “it’s a good time to negotiate prices with Boeing right now.”

The deal with IAG has been lauded by the American manufacturer with Stan Deal president and chief executive of Boeing Commercial Airplanes saying that: “Today’s agreement for up to 150 airplanes, including 100 options, is a welcome addition of the 737 to IAG´s short-haul fleets and reflects our commitment to support the Group’s continued network recovery and future growth with Boeing’s unrivaled family of airplanes.”

Mr. Deal also added that: “With the selection of the 737-8-200 and larger 737-10, IAG has invested in a sustainable and profitable future, as both variants will significantly lower operating costs and CO₂ emissions.”

John Flett

Author

  • John Flett

    John has always had a passion for aviation and through a career with Air New Zealand has gained a strong understanding of aviation operations and the strategic nature of the industry. During his career with the airline, John held multiple leadership roles and was involved in projects such as the introduction of both the 777-200 and -300 type aircraft and the development of the IFE for the 777-300. He was also part of a small team who created and published the internal communications magazines for Air New Zealand’s pilots, cabin crew and ground staff balancing a mix of corporate and social content. John is educated to postgraduate level achieving a masters degree with Distinction in Airline and Airport Management. John is currently the course director of an undergraduate commercial pilot training programme at a leading London university. In addition he is contracted as an external instructor for IATA (International Air Transport Association) and a member of the Heathrow Community Fund’s ‘Communities for Tomorrow’ panel.

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