Icelandair Still Examining The A321neo – But Will It Place An Order?

A few months into the Boeing 737 MAX grounding, Icelandair revealed that it was considering the Airbus A321neo as a replacement for its aging Boeing 757s. Indeed, with an average age of 20 years old, the 757s could be phased out in the next few years. Now, according to FlightGlobal, the Icelandic carrier says it will take the ‘next few months’ to decide whether it should include Airbus aircraft in its all-Boeing fleet.

The Boeing 757 has been the main aircraft for Icelandair. Photo: via Wikimedia Commons

Not only was Icelandair entertaining the prospect of adding Airbus aircraft to its fleet, but it was also considering the possibility of a full switch, having an all-Airbus fleet. According to FlightGlobal, Icelandair says “conclusions are expected in the next few months”.

Impact of 737 MAX grounding

The deliberations are a result of continued uncertainty with the 737 MAX. The one-year anniversary of crash of ET302 and the subsequent grounding of all 737 MAX aircraft is just a month away.

Airlines around the world have had to cope with their new jets not being able to fly. In addition to the parking and maintenance costs of the grounded jets, airlines have also had to rearrange schedules, postpone routes, and postpone older aircraft retirement.

Icelandair 737 MAX
Icelandair’s 737 MAX are waiting in Boeing Field. Photo: Getty Images

Icelandair acknowledges that “the risk of further delays is increasing” and says the MAX grounding has “already had significant adverse effect on the company’s operations and profitability and will continue to do so while the suspension remains in place”.

Indeed, further delays are always a possibility. Simple Flying has been reporting continuously on new timelines for the aircraft’s anticipated return to service with initial hopes being Summer 2019, then November 2019, and so on. The latest reports indicate that the grounding will be lifted around June 2020, if not slightly sooner.

Icelandair is reported to be monitoring the situation, maintaining “rolling 12-18 month contingency plans to ensure that all mitigating actions are taken”.

The possibilities for fleet renewal

Here are some possibilities for Icelandair as it moves forward with its fleet renewal strategy.

Scenario 1: Continue with the existing plan that will see the new 737 MAX jets replace the aging 757s. According to Cirium fleets data, Icelandair has five 737 Max 8s and a single Max 9 in storage. Furthermore, it has orders for another 10 Max jets. Its in-service fleet is all-Boeing and includes 23 757-200s, two 757-300s and four widebody 767-300s.

Scenario 2: Icelandair could operate a mixed-fleet by adding Airbus aircraft into its operations. The A321neo would be a perfect candidate as it not only comes in the base model but also offers the LR (long-range) variant and the XLR (extra long-range) version.

Scenario 3: The carrier could switch to an all-Airbus fleet and ditch the 737 MAX altogether. This would mean Icelandair selling its current MAX aircraft and canceling future deliveries and orders.

Airbus A321neo
Airbus had a strong 2019 with many orders for the A320 family of jets. Photo: Airbus

Benefits and drawbacks

There are some clear pros and cons to all of the options. The clear benefit to having a mixed-fleet is risk aversion, should a critical flaw be discovered in a particular aircraft type. The cost would be lowest if Icelandair maintains it’s all-Boeing course, as the orders are already on the way.

However, focusing on the prospect of adding Airbus aircraft, there are a few challenges that are presented. One challenge would certainly be the re-training of flight and ground crew on the new aircraft type.

Airbus factory Mobile
Airbus has a substantial backlog for A320 family orders. Photo: Getty

Furthermore, with other airlines entertaining similar possibilities, there is a lengthy wait time for any A320 family aircraft. The backlog at Airbus as of January 31 stands at 6,249 for A320 Family aircraft. If Icelandair wanted A321neos any sooner they would have to lease the jets.

Do you think Icelandair should go for the A321neo? Or go all-in with Boeing and the 737 MAX? Or maybe something else? Let us know in the comments.

We reached out to Icelandair with a request for an official statement on the matter. At the time of publishing, no response has come from the airline. We will update this article if any new information comes in.