British Airways owner orders 50 Boeing 737 MAX jets
May 19, 2022 04:45 PM
British Airways owner IAG said Thursday it has ordered 50 Boeing 737 MAX aircraft worth $6.25 billion at list prices in a boost for the crisis-hit jet after two deadly crashes.
The news comes amid recovery in the global aviation sector, which was ravaged by the deadly Covid pandemic, but analysts expressed doubt over whether it was a vote of confidence for Boeing or the industry.
"International Airlines Group has reached agreement with Boeing to order 25 737-8200 and 25 737-10 aircraft, plus 100 options," IAG said in a statement, adding it had been given a "substantial" discount.
"The aircraft will be delivered between 2023 and 2027 and can be used by any airline in the group for fleet replacement."
IAG, which owns also Spanish carriers Iberia and Vueling, said the order was subject to approval by its shareholders.
The European airlines giant had announced a letter of intent to buy 200 MAX jets three years ago at the Paris Air Show, despite deadly crashes involving the aircraft in 2018 and 2019.
"The addition of new Boeing 737s is an important part of IAG's short-haul fleet renewal," IAG chief executive Luis Gallego said in the statement.
"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."
While Boeing has resumed deliveries of the 737 MAX after a lengthy grounding following the fatal crashes, the company has halted deliveries of the 787 since May 2021 while it works through production problems.
CMC Markets analyst Michael Hewson told AFP that the order was "more about the (aviation) industry's woes than anything else".
IAG "gets a discount for replacing its older less fuel-efficient aircraft and Boeing gets to offload its 737-MAX planes which it is struggling to offload in the wake of the two crashes which trashed its reputation," he said.
"It's certainly not a vote of confidence in the conventional sense."
The 737 MAX was temporarily grounded worldwide following two crashes in Indonesia and Ethiopia that killed a combined 346 people.
IAG, which also owns Irish airline Aer Lingus, recently forecast a return to annual profit after narrowing Covid-induced losses as travel restrictions are eased.
The group had collapsed into annual losses during 2020 and 2021 as the pandemic ravaged international travel demand.