The beleaguered Boeing 737 MAX program which has seen aircraft grounded worldwide since a second fatal crash in a few months has received a major boost from British Airways’ parent company IAG. Announcing the signing of a Letter of Intent (LoI) at the Parish Air Show, Willie Walsh, IAG Chief Executive commented: “We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months having received approval from the regulators.”
While IAG has long been operating the Boeing 747 and 777 twin-aisle jets, it’s single-aisle fleet used by British Airways, Aer Lingus, Iberia and Vueling, together with its low-cost transatlantic startup LEVEL has been mainly made up of the Airbus A320 family of jets. Walsh has indicated he now wants to diversify IAG’s future fleet which will include both the 737 MAX and A320neo. IAG’s deal, though not yet finalized with Boeing, is for a mix of the 737 MAX 8 and Max 10 variants, the latter yet to enter into service.
Boeing has confirmed that the deal with IAG is worth just over US$24 billion at list prices. However, according to aircraft valuation firm Avitas’ data, the real value of the planes after standard discounts in the industry is nearer US$11 billion. With current problems surrounding the MAX program, there is every likelihood that IAG will have negotiated a discount much larger than standard.
