IAG Boeing 737 MAX LOI Intended To Combat Airbus Captivity

New details have emerged from the very strange Paris Air Show IAG order for 200 Boeing 737 MAX aircraft. Not only was the ‘order’ a letter of intent (not even a memorandum of understanding), but it was for the Boeing 737 MAX aircraft that has still not been deemed safe to fly.

Boeing
IAG has a letter of intent for 200 737 MAX aircraft. Source: Boeing

So why would IAG, owners of both British Airways, Iberia and others, sign a letter for Boeing? According to a reporting by Flight Global, it was to stop the domination of Airbus.

What are the details?

The Boeing 737 MAX 8 was involved in two crashes a few months ago which killed over 360 passengers and grounded the aircraft. Airlines and aviation authorities are currently meeting in Montreal to discuss the steps required to solve this situation and get the aircraft back in the air.

At the recent Paris Air Show, IAG ordered 200 Boeing 737 MAX aircraft, a mix of both -8s and -9s, to be delivered around 2023 onwards. It is a bit strange that an airline as major as IAG would throw themselves behind Boeing at the risk of PR damage.

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Boeing 737 MAX
There are four different 737 MAX variants available for airlines. Photo: Boeing.

But according to Willy Walsh, CEO of IAG, it was worth it to not be as reliant on Airbus.

During a webcasted panel session at the ACI Europe annual congress in the Cypriot city of Limassol on 26 June, Walsh noted that there had been ‘concern’ within the airline group for some time that it was becoming too reliant on the European airframer,” reported Flight Global, who went on to attribute Walsh saying that it was “Unhealthy” to rely only on one manufacturer.

Does IAG rely too much on Airbus?

If we were to look at the total fleet for IAG, we would notice the following:

  • Iberia operates an all-Airbus fleet, with 87 aircraft
  • British Airways operates 227 aircraft, with only 122 from Boeing. None are short-haul
  • Aer Lingus operates an all-Airbus fleet of 49 aircraft
  • Vueling also operates an all-airbus fleet of 123 aircraft, 86 of which are A320s

And according to their website:

“Fleet modernization will continue in coming years with further deliveries of 92 Airbus A320neo series aircraft, 41 Airbus A350s, and 12 Boeing 787s.”

British Airways Airbus A320 Tenerife Emergency
British Airways uses only Airbus A320s for their short haul fleet. Photo: Tom Boon – Simple Flying

With so many Airbus A320s making up their short haul fleet, it is no wonder that IAG is nervous that they are a bit over-extended with one airplane manufacturer.

Originally, back in 2012, IAG wanted to incorporate more 737 aircraft into their fleet makeup. But including a whole new type in their fleet would have been very expensive. However, now in 2019 their capacity to operate many different subtypes has improved and they feel ready to order the new Boeing 737 MAX.

IAG has said that they look forward to the 737 MAX getting a clean bill of health and back in the skies.

What do you think? Should IAG be so quick to cozy up to Boeing? Let us know in the comments.

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Anthony Stockle

I cannot understand this large order. As an experienced long haul passenger I would never take a flight on this type of aircraft given its terrible history. Surely there are many others who would also shun flying on this aircraft. Please think again Mr Walsh.

Goofy

You don’t understand for the simple reason that it doesn’t make sense.

A frequent flyer myself I would never set foot on this aircraft no matter how successfully they rebrand it and what kind of seats and entertainment systems they will install to lure naive travellers onboard.

Joanna Bailey

It’s only a letter of intent right now. I intend to win the Euromillions tonight… I’ll let you know how much my intent means tomorrow.

Goofy

This is just a badly executed attempt to repair on Boeing’s image after this 737 MAX disaster. Nobody concludes airplane contracts like that in impressive round numbers. Can we please see the plans for their employment in the respective airline fleets? The whole argumentation is flawed as is obvious from the British Airways fleet which consists of only 122 Boeings out of a total fleet of 227. That means that the majority of planes in the fleet are Boeings, so why describe the figure as “only”? If diversity of procurement were a concern why not land 50+ contracts for Suchoi… Read more »

Joanna Bailey

We will wait and see on the MAX, but I’m not convinced this was ever a real order.

Matt

None of those 122 are narrow bodies anymore.

Phillippe

This is total rubbish from from IAG. Air Asia use only Airbus planes. You don’t see them complaining about Airbus dominating their purchase choice! Boeing 737 Max should be completely banned. The design is fundamentally flawed. It uses a software to correct the flaw and in itself is flawed. Boeing should be charged for manslaughter for those air crashes. And I don’t consider them accidents!

Joanna Bailey

Lots of airlines are Airbus only…. I feel there is more to this than meets the eye.

Terrance

I agree, probably discount prices for backing this very flawed aircraft is the reason.

Paul

For me this is quite clear: IAG wants to get important discounts from Airbus… so they said that they want to order a huge amount of Boeing aircrafts… so that Airbus replies by offering more discounted A320nea or A321XL or XLR…
and the winner is IAG at the end…

Joanna Bailey

They don’t seem to be able to lose from this situation, you’re right

Matt

Ding, ding, ding. You are correct! They’re going to use this to get a deal on A320s that they wouldn’t get otherwise. Then, they’ll also be able to negotiate a good deal on some more Boeing wide-bodies by doing them a solid. When was the last time a major carrier signed a LOI for an aircraft already in high volume production?

Nigel

So, rather than being “over-reliant” on the reliable, flexible and popular models supplied by Airbus, Mr. Walsh wants to diversify his fleet to include a disastrous flying coffin? That’s interesting logic 😏

Joanna Bailey

… if it ever materializes into a real order, that is

Andy

I think we all probably came to this conclusion about 10 seconds after it was announced. After all, who would knowingly buy “defective goods”? It was a favour to spare Boeing’s blushes, pure and simple.

Joanna Bailey

It does seem something of the sort.

Martin

I’ve seen the 737 Max called a Barbie Dol. it’s been stretched and pulled so far that it cannot stand on its own. I won’t fly on one by choice, not now, not ever. Boeing has made way too many compromises in designing this plane. They burnt up consumer trust in the chase for the $. As the supposed no. 1 plane manufacturer they should have known that safety of passengers always comes first. Accountants run Boeing now, not engineers.

Joanna Bailey

The Barbie thing is an interesting analogy, thanks for that!

Nigel

Yeah, I love that Barbie analogy 👍

Niklas Andersson

like Cars, Train, and Airplanes… Everythings are bad Engineered in USA today, why you keep going on…
Republican and Trump make America Smaller and Bad…. Please Make us Dream Again !
Make good Airplanes and Infrastructures In USA … so we kan travel there Again.

Jorge

I think this LOI from IAG is pure politics, whose scopes I do not know. My first impression is that this sort of public statement seeks to reinforce trust in the seriously damaged company’s reputation.
As Joanna well pointed out, there is more to this than meets the eye. Guess we’ll just have to wait and see.

Launch Director

The biggest problem with the Boeing 737 MAX is Boeing’s lack of oversight regarding S/W changes, and their DREADFUL PR handling of the issue. The apology at the Paris Airshow should have happened months ago, after the 1st crash, as Boeing already knew what the issue likely was. They could have initiated the ground right then. If you really study the technical details of the MCAS issue, it’s a fair simple problem to fix. Boeing simply bungled the whole thing so badly, the entire aircraft is being studied with a magnifying glass. Any airplane would be found to have flaws… Read more »

Martin

I agree with a lot of what you have written. Boeing made a series of decisions based around speed to market and minimal re-training requirements to get into a cockpit of a 737 Max. These are marketing and finance decisions. The Boeing of old was a company driven by engineering excellence that resulted in great products being built and delivered. THIS was their success. Look at the last two product introductions (787 and 737 max) and see how both resulted in world wide fleet groundings – and in the case of the 737 not one but TWO catastrophic crashes and… Read more »

Launch Director

My only response it that it’s Apple and Oranges. The 787 was a clean-sheet, leap in technology all-new, all-composite airplane. Absolutely groundbreaking on many levels. There’s bound to be teething issues, like the F-35. The state-of-the-art batteries did ground the plane briefly, and a variety of other issues have cropped-up. The A380 had it’s issues too. As I understand it, the MAX’s rush to market was facilitated by MCAS, which was specifically added to try and make it handle like the NG. It was hidden purposely (how high-up in Mgmt knew?), solely to avoid a lengthy certification process as a… Read more »

Joanna Bailey

The latest flaw is to do with the MCAS, so absolutely not in all 737s.

Launch Director

Yes, I have since read you are right, just MAX’s, but I didn’t think it had anything to do with MCAS? Isn’t it a possibility flawed chip affecting the plane’s flight-control computer — it can cause uncommanded movement of a panel on the aircraft’s tail, pointing the nose downward. Some articles call it the runaway stabilizer condition…

Martin

The core issue is that to fit the new much bigger engines in under the wings of a plane already low to the ground (it was designed in the 1960’s for airports with little infrastructure) meant that the engines had to be moved forward and then upwards. Take a look at the 737 NG series engines and notice how the bottom of the engine is flat rather than round and you will now understand that the NG series 737’s hit the limit of the current engine placement. This MAX change altered the flying and aerodynamic characteristics of the 737 MAX… Read more »

Eric 5

I would never ever fly on a B737MaX ever again and I would avoid any airlines that flies them as much as possible!

Tomasi Turagava

IAG Group CEO Mr Wash figured this one out proficiently. LOIs are not binding & IAG can pullout or rescind this LOI without any legal ramifications. As it’s an LOI, it opens the door for a productive counter offer from AIRBUS & subsequent counter presentations from BOEING. Eitherway, IAG WINS, because it gets discounts on them MAXs & also counter competitive pricing incentives for the A320s & even may get AIRBUS to compare A321XLR figures matched against the MAX 9 &10, which compels me to think that once the MAX’s are re-accredited to fly again, watch BOEING stretch the MAX… Read more »

James

Isn’t BA’s fleet made up of 277 aircraft?

WordsMatter

IAG should be careful not to create the impression with the public that they too will put finances ahead of safety.