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Thursday, August 18, 2022

British Airways Orders 50 Boeing 737MAX Jets

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British Airways and Iberia’s parent company, Iberia, has confirmed an order for at least 50 Boeing 737MAX jets, with options for a further 100 jets to be delivered between 2023 and 2027.

International Consolidated Airlines Group (IAG), based in Madrid, claimed it had gotten a “significant discount” on the purchase, which would have cost $6.25 billion at list value for the firm order of 50 planes.

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The European airline group said in a statement that it has bought 25 Boeing 737-8200 aircraft that can transport up to 200 people in a high-density configuration and 25 Boeing 737-10 jets that can carry up to 230 passengers.

Both aircraft are part of the 737MAX family, however, IAG did not recognize this — likely because to the model’s contentious history.

The order is significant for Boeing, not only because airlines have recently preferred Airbus’ A320 single-aisle aircraft to the 737, but also because IAG now only uses A320 series aircraft for short-haul flights across all of its brands.

IAG declined to identify whose airline brand the planes will fly for, but chief executive Luis Gallego said the deal was “an important aspect 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 signed a Letter of Intent with Boeing in June 2019 for a possible order of up to 200 MAX planes, which would have been operated by Vueling and LEVEL, IAG’s Spanish low-cost brands.

A new low-cost British Airways subsidiary situated at Gatwick airport is another potential buyer for the MAX jets.

Due to European authorities’ crew training requirements, the 737MAX is unlikely to be used by British Airways or Iberia out of Heathrow.

Ryanair has put a fresh 737MAX order on hold unless Boeing agrees to decrease the price to what the Irish discounter is seeking.

A casual observer might think Ryanair had little negotiating strength as a sole 737 operator with no interest in switching to Airbus, but CEO Michael O’Leary says he is willing to wait years for the market to develop and prices to fall in order to achieve a good deal.

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