Comment: IAG Finalizes Agreement for Up to 150 Boeing 737 MAX


International Airlines Group (IAG) has reached an agreement with Boeing to order 25 737-8200 and 25 737-10 aircraft, plus 100 options. 
The aircraft will be delivered between 2023 and 2027 and can be used by any airline in the Group for fleet replacement.

“The addition of new Boeing 737s is an important part of IAG´s short-haul fleet renewal. These latest generation aircraft are more fuel efficient than those they will replace and in line with our commitment to achieving net zero carbon emissions by 2050,” said Luis Gallego, IAG´s chief executive.

The 737-8-200 will enable IAG to configure the airplane with up to 200 seats, increasing revenue potential and reducing fuel consumption.

Announcement finalizes a commitment made by IAG for the 737 at the 2019 Paris Air Show and is subject to approval by IAG shareholders.

IAG Airlines

  • British Airways
  • Iberia
  • Aer Lingus
  • Level
  • Vueling

Interestingly, the airlines from the IAG Group have exclusively Airbus A320 series aircraft in their narrow-body fleets, here we exclude IAG’s regional airlines and those airlines in which they have shares. We can still remember how British Airways had Boeing 737 aircraft in its fleet, but they are retired. But British wants to set up a separate airline at Gatwick Airport to connect London with tourist destinations. These new aircraft can ideally enter this story, they have a large capacity and a sufficient range.

It must be emphasized that 25 737-8-200 aircraft will surely end up in the fleet of a low-cost airline from a group such as Vueling, Iberia Express, or the new “tourist” British in Gatwick. The reason is very simple, this aircraft has a large passenger capacity, up to a maximum of 200 passengers with reduced seat spacing, and classic airlines from the IAG group like British or Iberia still want to provide passengers with a certain amount of comfort. With low-cost carriers, passengers are aware that for the little money they pay for the ticket, they cannot expect great comfort and a large distance between seats, the same principle applies to charter and “tourist” flights. Suffice it to mention Ryanair, ordered the aircraft in question, and it has a capacity of 197 seats.

For the other 25 aircraft 737-10 those who follow the air force can say that it can end up with almost any airline from the IAG group. The aircraft has a capacity of up to 230 passengers. It will be used by airlines that need more capacity on short and medium-haul routes. Although it will also be able to be used by low-cost airlines, this aircraft will likely end up in the fleet of a classic carrier. But it’s hard to predict where. The Boeing 737-10 is a competitor in capacity to the Airbus A321. The Airbus A321 is a part of Air Lingus, British, Iberia, Iberia Express, and Vueling fleets, which means that all these airlines need an aircraft with a capacity of over 200 seats. However, Aer Lingus uses the A321neo for transatlantic flights, and the 737-10 has a shorter range, which is why Aer Lingus stays with the Airbus fleet. One example is Ryanair, which aimed to buy a Boeing 737-10 but did not buy it in the end because they couldn’t agree on price (although they will eventually agree because Boeing needs an order and Ryanair needs new aircraft). But now we can see similarities at IAG, buying the planes Ryanair wanted, and if we cross out at IAG, Vueling could be a likely winner of Boeing’s fleet. Vueling has a large fleet, a dozen large and small bases in Europe, and can easily adjust and deploy the fleet where the demand is. If Vueling takes over all 50 aircraft ordered, even those 100 purchase options will likely be converted into a confirmed order (or at least part) and it can be expected that the entire Vueling fleet will switch to Boeing aircraft. This is a realistic option, and newer aircraft from the fleet can be easily transferred to other airlines from the IAG group without any problem, as they all have Airbus A320 series in their fleets.

There are many combinations in whose fleet the aircraft could end up, but it is interesting how IAG opts for a dual narrow-body fleet, and they don’t want to be a “slave” to just one aircraft manufacturer.