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British Airline Group IAG Issues Letter Of Intent To Purchase 200 Being 737 Max Crafts


06/21/2019


British Airline Group IAG Issues Letter Of Intent To Purchase 200 Being 737 Max Crafts
The owner of the British Airways – IAG, has agreed to place order for 200 of Beoing’s 737 Max jet in a letter of intent to the airplane marker which comes as a boost for the company which has all of its 737 Max jets grounded for months now all over the world..
 
The 737 Max jets would soon be allowed to fly again and be used in service in the coming months, said the British airline group.
 
Following the grounding of the 737 Max jets after two deadly crashes, Boeing is now attempting to develop a software fix for planes. The crash that caused the grounding of the 737 Max planes globally took place in March when a plane of the Ethiopian Airlines flight crashed to the ground soon after takeoff killing all 157 people on board. Just five months prior to that crash, 189 people were killed in a crash of a Boeing 737 Max plane that belonged to the Lion Air.
 
According to reports, this letter of intent from IAG is not a firm order and it could be cancelled if the purchaser wanted to in the future. Despite this however this development is being seen as a boost for the Boeing 737 Max planes because the company has found it hard to allay the fears and concerns about the safety of the crafts thereby threatening its business.
 
The 737 Max planes remains a flagship product for the American giant despite it being grounded still globally. The 737 Max planes have been the best selling crafts of Boeing in its entire history. The company still has orders for more than four thousand of them which is much more than all of the other plane models combined.
 
While still retaining the right to cancel the order for the 737 Max jets, the letter of intent by AIG has essentially has given a vote of confidence for the company and its efforts of bring in changes to make the aircraft unquestionably safe as well as its capacity to impress regulators across the globe that it has made the planes absolutely safe. That would pave the way for the planes to return back into service. 
 
On the part of the airlines all, the return to service of the 737 Max is also economically important because it is highly efficient and has low operating costs. Airbus simply cannot supply the whole market with its rival A320neo.
 
If the AIG ultimately matures, it would be valued at $24 bn at list prices. However, the "substantial discount" negotiated by IAG's savvy chief executive Willie Walsh is also being expected to be quite large. At the same time, this announcement could also help to boost the mood at Boeing where it would be understandable if something of a siege mentality had developed over the past few days.
 
The British airline group said in a statement that the 737 Max planes would be used by IAG's airlines including British Airways, Vueling and Level.
 
"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 chief executive Willie Walsh.
 
(Source:www.bbc.com)