British Airways today revealed plans to buy 200 Boeing 737 MAX jets despite the troubled aircraft being grounded following two fatal crashes that killed 346 people.
The model has been widely criticised after two disasters within six months of each other, and the announcement has sent shockwaves through the aviation world.
However, the International Airline Group – which also owns Iberia, Vueling and Air Lingus – said it had been won over by Boeing’s assurances that safety concerns had been rectified.
The announcement by the International Airline Group, which owns British Airways (pictured) alongside Iberia, Vueling and Air Lingus, shocked the aviation world
‘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,’ said IAG chairman Willie Walsh.
The statement came as a surprise at the Paris Air Show where aviation experts are still reeling from the industry-wide fallout of the accidents.
At the start of the show, Boeing’s head of commercial aircraft Kevin McAllister apologised for the crashes.
The US aerospace giant is battling to regain the trust of passengers, pilots and regulators after a 737 operated by Indonesia’s Lion Air flight crashed last October, followed by an Ethiopian Airlines jet in March.
If today’s deal is converted into a firm order, it would be worth an estimated $24 billion according to list prices.
IAG said the aircraft would be used by a number of its airlines including Vueling, LEVEL, and British Airways at London Gatwick airport.
IAG, also the parent company of Aer Lingus and Iberia, currently flies 582 aircraft to 268 destinations and carried 113 million passengers in 2018.
Boeing said IAG, whose single-aisle fleet is currently made up almost exclusively of Airbus A320 aircraft, was turning to the 737 MAX ‘as part of diversifying its future fleet to spur competition’.
Boeing CEO admits the company made a ‘mistake’ in handling a problematic cockpit warning system in its 737 Max jets before the deadly crashes
The CEO of Boeing has admitted the company made a ‘mistake’ in handling a problematic cockpit warning system in its 737 Max jets before two crashes of the plane killed 346 people.
Chief executive Dennis Muilenburg promised transparency as the U.S. aircraft maker tries to get the grounded model back in flight.
Muilenburg told reporters in Paris on Sunday that Boeing’s communication with regulators, customers and the public ‘was not consistent’ and that is wasn’t acceptable.
The U.S. Federal Aviation Administration has faulted Boeing for not telling regulators for more than year that a safety indicator in the Max cockpit didn’t work.
Boeing Chief executive Dennis Muilenburg admitted on Sunday that the company made a mistake in handling the warning system in its 737 Max jets
Pilots are angry the company didn’t tell them about the new software that’s been implicated in the crashes in Indonesia and Ethiopia.
‘We clearly had a mistake in the implementation of the alert,’ Muilenburg said.
He expressed confidence that the Boeing 737 Max would be cleared to fly again later this year. The model has been grounded worldwide for three months, and regulators need to approve Boeing’s long-awaited fix to the software.
Muilenburg called the crashes of the Lion Air and Ethiopian Airlines jets a ‘defining moment’ for Boeing, but said he thinks the result will be a ‘better and stronger company’.
Speaking ahead of the Paris Air Show, Muilenburg said Boeing is facing the event with ‘humility’ and focused on rebuilding trust.
He forecast a limited number of orders at the Paris show, the first major air show since the crashes, but said it was important to attend to talk to customers and others in the industry.
Muilenburg also announced that Boeing is raising its long-term forecast for global plane demand, notably amid sustained growth in Asia.
Safety concerns, trade wars and growing security tensions in the Gulf are dampening spirits at the world’s largest planemakers as they arrive at this week’s Paris Airshow with little to celebrate despite bulging order books.
The U.S. Federal Aviation Administration has faulted Boeing for not telling regulators for more than year that a safety indicator in the Max cockpit didn’t work
The aerospace industry’s marquee event is a chance to take the pulse of the $150 billion a year commercial aircraft industry, which many analysts believe is entering a slowdown due to global pressures from trade tensions to flagging economies.
Humbled by the grounding of its 737 MAX in the wake of two fatal crashes, U.S. planemaker Boeing will be looking to reassure customers and suppliers about the plane’s future and allay criticism of its handling of the months-long crisis.
The grounding of the latest version of the world’s most-sold jet has rattled suppliers and even fazed rival Airbus, with the European company avoiding the traditional baiting of Boeing, while remaining distracted by its own corruption probe.
Aerospace executives on both sides of the Atlantic are concerned about the impact of the crisis on public confidence in air travel and the risk of a backlash that could drive a wedge between regulators and undermine the plane certification system.
Airlines that rushed to buy the fuel-efficient, longer-range MAX are taking a hit to profits since having to cancel thousands of flights following the worldwide grounding in March.
Even the planned launch of a new longer-range version of the successful A320neo jet family from Airbus, the A321XLR, is unlikely to lift the industry’s uncertainty, analysts said.
Pilots are angry the company didn’t tell them about the new software that’s been implicated in the crashes in Indonesia and Ethiopia that killed 346 people
‘Boeing’s MAX crisis isn’t the most ominous dark cloud, since it can be solved, but traffic numbers are genuinely scary,’ said Teal Group aerospace analyst Richard Aboulafia.
‘If March and April are a sign of things to come, we’re looking at broader industry demand and capacity problems.’
‘Net orders might be the lowest in years,’ Aboulafia added.
Others dismiss fears of a downturn, citing the growth of the middle class in Asia and the need for airlines to buy new planes to meet environmental targets.
Airbus and Boeing are both looking at steps to make their aircraft more fuel efficient and reduce their carbon footprint amid a growing environmental protest movement in Europe.
‘The only solution that the industry has is the newest most fuel-efficient aircraft,’ John Plueger, Chief Executive of Air Lease Corp, told Reuters. ‘So that replacement cycle is going to continue.’
‘We’re talking to so many airlines who still want more aircraft, and there’s really been no lessening of those discussions,’ he said.