International Airways Group, the parent company of British Airways, has ordered 200 Boeing 737 Max aircraft in a significant vote of confidence in the plane, which remains grounded after two deadly clashes.
The agreement, worth an estimated $24bn at list prices, ends an orders drought for Boeing since the second deadly crash of the Max in Ethiopia in March. More than 300 people were killed in the two accidents, which have been linked to a flight-control software on the Max.
There is still no timetable for when the model will return to the skies and Boeing has yet to formally submit a software fix to the US aviation regulator.
But Willie Walsh, chief executive of IAG, told reporters at the signing of a letter of intent at the Paris air show that he had “every confidence” in Boeing and expected the Max to “make a successful return to service in the coming months”.
Mr Walsh, a former 737 pilot, said he had flown the Max in a simulator and experienced MCAS, the manoeuvring characteristics augmentation system, which played a role in both crashes. He said he would “not hesitate getting on board a Max tomorrow” but added that its return to service would be “subject to rigorous review by the regulators”.
Although the order is valued at $24bn at list prices, IAG will have received discounts. Analysts suggested the actual value of the deal could be worth around $11bn.
We are partnering with the Boeing brand. It is a brand that I trust
The Max deal with IAG is doubly significant because, although IAG has long operated Boeing’s twin-aisle aircraft such as the 747, the carrier’s existing single-aisle fleet is almost exclusively from the Airbus A320 family of jets.
“What we are doing, we are partnering with the Boeing brand,” Mr Walsh said. “It is a brand that I trust and I will continue to do that. The aircraft is an aircraft that is produced by a world-class company. I have said that consistently.”
Air shows are typically the time when Boeing and its European rival Airbus compete in a public battle for orders but Paris started slowly for the US group, which has made returning the Max safely back into service its priority.
Boeing had earlier announced an order from Korean Air for 30 787 Dreamliner jets. Air Lease Corporation separately announced a deal to purchase five Dreamliners.
Under the terms of the deal with Boeing, IAG will purchase a mix of 738 Max 8 and 737 Max 10 aircraft to be delivered between 2023 and 2027. Mr Walsh said the aircraft fits “very well with our operation at Gatwick” airport where it will be flown by British Airways, Vueling and a French airline called Level. The letter of intent signed on Tuesday remains subject to final agreement.
Asked how passengers might react, Mr Walsh said he was confident “people will understand the process the aircraft has gone through” to get back in the skies.
The planes will be powered by Leap engines manufactured by CFM, a joint venture between GE and Safran of France.
Speaking to the Financial Times before news of the IAG deal was announced, Philippe Petitcolin, chief executive of Safran, said he expected the Max to fly again “sometime during the summer” but added that it was up to the regulators.
Boeing cut production of the plane in mid-April from 52 per month to 42 but Safran had kept producing at the original rate to catch up on earlier production delays. Mr Petitcolin said the engine maker had now caught up and was producing on average 25 engines a week. He said he did not expect to have to reduce output due to the extended grounding.
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