IAG Group is close to ordering new single-aisle jets

Boeing and Airbus are being consulted on the supply of 737 MAX and A320neo aircraft, according to Reuters

After making a gesture of confidence towards Boeing almost three years ago, when it signed a Letter of Intent to order 200 737 MAXs, the IAG Group has changed its strategy and is negotiating with not only the planemaker but also Airbus for an order for single aisle.

Now the potential demand should be much smaller, with just over 50 aircraft, sources said to Reuters.

The $24 billion pre-agreement with Boeing during the 2019 Paris Airshow eventually expired amid problems arising from the Covid-19 pandemic.

IAG has since replaced Willie Walsh with Luis Gallego as CEO, who has returned to the market to negotiate a more favorable deal for the group, which controls British Airways, Iberia, Vueling and Aer Lingus.

Iberia Airbus A320neo

The IAG has a fleet of 590 aircraft, the vast majority supplied by Airbus. The A320 family alone has 362 jets spread across the group’s various airlines.

Most of these planes are quite old, which means higher operating and maintenance costs.

British Airways has had a large number of 737 jets in the past, but withdrew the last planes from service between 2014 and 2015. The choice of Boeing would be timely as there is surplus production of the MAX series after several customers gave up on the model.

Opting for Airbus involves negotiating the replacement of pending orders and options as the waiting list for the Neo family aircraft is quite long.

Despite planning a deal for a long time, the IAG is not expected to need new planes until 2024, according to its chief financial officer.

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