The Paris Air Show is going on right now, which has led to quite a few aircraft orders. However, this year it’s Airbus with the edge over Boeing — Airbus unveiled the A321XLR, while Boeing hasn’t done a whole lot of anything, given their 737 MAX challenges. I’d argue it would be in bad form for them to even be showcasing new things, rather than fixing their 737 MAX situation.
Earlier I wrote about how IAG placed an order for 14 Airbus A321XLRs, which they plan to use for Aer Lingus and Iberia. Rather oddly, that’s the less interesting of two IAG orders that were announced today.
IAG signs letter of intent for 200 Boeing 737 MAXs
IAG has signed a letter of intent to acquire 200 Boeing 737 MAX jets, in a deal valued at $24 billion at list prices. You read that right. IAG placed a massive order for a plane that has been grounded for months, with no end in sight.
I’d note that this is only a letter of intent as of now, and details are still limited:
- IAG intends to get a combination of Boeing 737 MAX 8s (which can seat up to 178) and 737 MAX 10s (which can seat up to 230), though hasn’t revealed how the numbers will be split between the two types of planes
- IAG hasn’t revealed how the planes would be split between British Airways, Iberia, Aer Lingus, Vueling, and LEVEL
This is also an interesting move because up until now IAG has almost exclusively used Airbus planes for their narrow body fleets.
IAG’s CEO, Willie Walsh, had the following to say:
“We’re very pleased to sign this letter of intent with Boeing and are certain that these aircraft will be a great addition to IAG’s short-haul fleet. We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months having received approval from the regulators.”
Boeing Commercial Airplanes President & CEO, Kevin McAllister, had the following to say:
“We are truly honored and humbled by the leadership at International Airlines Group for placing their trust and confidence in the 737 MAX and, ultimately, in the people of Boeing and our deep commitment to quality and safety above all else. We are delighted that the IAG team recognized the superior qualities of the 737 MAX and has indicated an intention to return to the Boeing 737 family. We look forward to building on our long-standing partnership with IAG for many years to come.”
It’s interesting to note that IAG’s press release about this doesn’t use the word “MAX” at all. It only refers to the plane as the 737. In the meantime Ryanair has done something similar — they’ve rebranded the 737 MAX 200 as the 737-8200.
Why this leaves a bad taste in my mouth
Maybe I’m off base here, but there’s something I find sleazy about this:
- As of now this is just a letter of intent, so IAG isn’t actually “putting their money where their mouth is”
- I’m sure they’re going to get an amazing deal from Boeing if they follow through with this order, both because Boeing will be desperate for business for this plane, and also because they value IAG’s statement of confidence
I can’t help but feel like on some level this trivializes the death of 300+ people who died due to Boeing’s negligence to essentially sign this letter of intent while the plane is still grounded.
IAG is essentially trading positive press for Boeing for a good deal on the plane. If that weren’t the case, I imagine they would have expressed interest in the plane long before the 737 MAX was grounded, or they’d wait until the 737 MAX is flying once again, and confidence in the plane isn’t as low as it is.
So yeah, I could be off base, but in some way this feels like trying to profit off of tragedy. I feel like it would be in much better taste to sign an LOI after the plane is flying again, and aviation authorities across the world have certified and endorsed the safety features of the aircraft.
Maybe I’m too focused on the optics here, though. I do believe the 737 MAX will fly again, and I also believe it will be a safe plane once aviation authorities around the world endorse it. But in the meantime…
There’s no doubt this is a huge win for Boeing. Even if IAG doesn’t actually follow through on this order (which is a very real possibility), this is the most confidence that any airline has shown in the 737 MAX, aside from those airlines operating it (who have a vested interest in the plane).
That doesn’t change the fact that I find this all to be a bit uncomfortable, but maybe that’s just me.
What do you guys think — “yay” to Boeing for securing an order and to IAG for showing their confidence in the plane, or “yuck” for the timing of all of this?