Icelandair Has A Boeing 737 MAX Dilemma

Icelandair is currently in the midst of phasing out its Boeing 757 aircraft. However, as these aircraft are due to be replaced by the Boeing 737 MAX, Icelandair has a dilemma. It seems as though Airbus may be the answer.

Icelandair’s Boeing 737 MAX fleet is currently grounded. Photo: Boeing

Icelandair operates 25 Boeing 757 aircraft. They have an average age of over 20 years between them according to As such, it is no surprise that the airline is looking to replace them. However, as the Boeing 737 MAX is currently grounded, Flight Global reports the airline is looking to complement the aircraft with the Airbus A321neo.

Grounded aircraft

An aircraft sitting on the ground is a problem for airlines. This is for a number of reasons. Firstly, an aircraft sat on the ground is clearly not flying through the air. As such, it has no passengers and is not making money. In fact, the opposite happens. Typically, carriers have to pay for the space their grounded aircraft occupy.


Additionally, Iceland is likely not the best climate to store aircraft for a long period of time. In fact, aircraft are usually stored for long periods of time in hot and dry climates such as the Californian desert. It is unclear how the Boeing 737 MAX aircraft in Iceland are currently being stored.


Icelandair Boeing 737 MAX fleet

According to data from, Icelandair currently has nine Boeing 737 MAX aircraft. This is comprised of seven Boeing 737 MAX 8 aircraft, and two MAX 9 aircraft. Of these, only three MAX 8s are flying, a further two MAX 8s have been delivered. The remaining aircraft are still in Seattle awaiting delivery.

Boeing 737 MAX Icelandair
Icelandair has orders for a number of Boeing 737 MAX aircraft. Photo: Boeing

The grounding of the fleet has, however, had implications for Icelandair. It has meant that the timeline for retiring the Boeing 757 has been pushed back. Additionally, it has meant a dip in profits.


Financial effects

According to Flight Global, the grounding of the MAX has put a dent in the airline’s performance for Q1. However, it is important to note that higher crew incomes also played a role. Let us take a look at some of the numbers:

  • Revenue dropped by 7% to $248 million;
  • Pre-tax loss increased by 57% to $68.5 million;
  • Net losses increased by 60% to $55 million.

It is thought that the grounding of the Boeing 737 MAX has directly cost Icelandair $3 million during Q1 of 2019. The Icelandair group has “has initiated discussions with Boeing regarding compensation for all the financial loss resulting from the suspension”. This follows behind other airlines including Norwegian.

The Boeing 737 MAX is set to replace some Boeing 757 aircraft. Photo: Tom Boon – Simple Flying

What about Airbus?

In the group’s Q1 briefing, it was hinted at a number of different options for the airline’s fleet strategy. Almost all include Airbus aircraft. One strategy looks at also ordering Airbus A321neo aircraft to accelerate the retirement of the Boeing 757. Another option reportedly being mulled over by the airline is eventually switching to an all Airbus fleet. This would see all of the airline’s Boeing aircraft being retired.

What do you think Icelandair should do with their Boeing 737 MAX aircraft? Let us know in the comments!


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simon phillips

I think, given the magnitude of the design error by Boeing, It brings into question their general management.
This seems more than an over sight, its out right incompetence. If I was them I would send the 737 Max’s back and switch to airbus completely.

Personally I would never want to fly on an unstable aircraft like the 737Max that needs a corrective control system to over come their general poor aerodynamic design.


I don’t think they will order A321s

Nicholas Colloff

Icelandair should return their current 737 MAX planes to Boeing for storage and refund, cancel outstanding orders and turn to Airbus. Surely there must be a breach of contract angle to this, due to Boeing’s non-disclosure of information ref. MCAS. The current proposal for fixing the MCAS problem is flawed, since if a ‘disagree’ condition is detected between the only two AOA sensors, MCAS will not operate. This negates the reason for having the MCAS system in the first place; to prevent stall from the unstable aerodynamics created by their mechanical modifications to the airframe. The plane is fundamentally flawed… Read more »


A321 LR and XLR are far better aircraft.


I think Icelandair should move to the A321. It’s a far superior aircraft from both a performance perspective and a passenger comfort perspective. The MAX is an unstable airframe that will always to dependent on some version of MCAS. This has been a gross and negligent error by Boeing from many perspectives (planning, execution, etc.).


The 737 problems is in its landing gear and its airframe, that can’ accomodate a longer main landing gear. The 737 was designed in the 60’s with the old PW JT8D engines that have a smaller diameter and the airframe and landing gear were designed based upon that engine’s dimensions to let the bottom of the necelle to clear the tarmac. But when Airbus launched its A320 back on 1980 Boeing faced a hard decision: design a new aircraft from the scartch or update the 737 to accomodate the new high bypass and less fuel guzzling CFM56 engine. By economical… Read more »

Lee Zimmerman

This is something the business schools use as a model for analysis…..Boeing post the 2 crashes has made terrible mistakes by the CEO….

It always makes me nervous when I know what should be done, but is not…
Lee Zimmerman
405 413 8500

Sirius White

I’m thinking of visiting Iceland. however now I’ve learned IcelandAir might be using Boeing 737 Max I might use another airline.

hans junker

Iceland Air still offers use of 737 MAX 9 for flights to Amsterdam. Incredible! I sure will find another carrier. As a matter of fact, Boeing should be boycotted, including all Airlines that still operate these planes with a rushed and flawed design. And a final comment, who will trust the FAA and Boeing when the day comes – and that day will come – when the 737 MAX is being declared safe to fly?!

Greed, cutting corners, rushing things never really work out in the end. What a refreshing thought!

kim norager

I will never fly a MAX because its fundamentally a flawed design and its my impression from reading blogs and the likes that many travellers share this position. So you may not have a choice but switching to Airbus asap.

John Fee

Icelandair should refuse to accept 737 Max planes and should ground their current fleet. I am booked to fly with Icelandair in March. If I show up and it is a Max or a renamed Max, I will not fly in it.