British Airways owner IAG has agreed to order 50 Boeing 737 Max jets, handing the US aerospace group a much-needed boost as it struggles to overcome a series of production delays to its core programmes.
IAG on Thursday said the order for the narrow-bodied aircraft was worth $6.25bn at list prices, but that it had secured a “substantial discount” following negotiations.
The order is a boost for Boeing’s 737 single-aisle workhorse jet, and comes at a time when the Seattle-based company has faced criticism for a run of delayed deliveries and lost business to rival Airbus.
Ryanair’s chief executive Michael O’Leary this week said Boeing needed new management to help turn round problems within its commercial aviation business, which have included certification issues on its major aircraft programmes.
Boeing has been steadily securing orders for the Max since it was declared safe to fly again by US aviation safety regulators in November 2020. Other regulators followed shortly afterwards. About two-thirds of the planes sold by the company in 2021 were variants of the Max.
IAG will take delivery of 25 Max 8200 aircraft, which are based on its core design for the single-bodied aircraft, and a further 25 Max-10, a newer larger variant which is yet to be certified by aviation safety regulators.
Deliveries are scheduled to take place between 2023 and 2027, and the planes can be used across IAG’s stable of airlines, which includes BA, Iberia and Aer Lingus. The IAG order also contained options to order a further 100 jets.
The order represents a smaller version of an initial commitment made by IAG for up to 200 Max jets at the 2019 Paris air show.
The announcement was seen as a significant vote of confidence in the Max, which, at the time, was still grounded after two deadly crashes that killed 346 people and tarnished the reputation of the US aircraft manufacturer.
Willie Walsh, the then chief executive of IAG, gave his backing to the manufacturer, telling reporters that he had “every confidence” in Boeing.
On Thursday, Walsh’s successor Luis Gallego said the Max order was an “important part of IAG’s short haul fleet renewal”, and that their fuel efficiency would help drive down carbon emissions.
“With the selection of the 737-8-200 and larger 737-10, IAG has invested in a sustainable and profitable future, as both variants will significantly lower operating costs and CO₂ emissions,” said Stan Deal, president and chief executive of Boeing Commercial Airplanes.
“Today’s agreement . . . reflects our commitment to support the group’s continued network recovery and future growth with Boeing’s unrivalled family of aeroplanes.”