IAG, the owner of British Airways ordered 14 Airbus A321XLR, but signed just a letter of intent to buy 200 MAX jets.
Letter of intent is non-binding agreement, indicates a desire to do business together, but can walk away anytime without paying penalties. LOI agreement will be assured only when it is transferred to a firm order.
Major challenge for Boeing now is to convert IAG’s letter of intent into a firm order, while Airbus is determined to take away business from Boeing.
IAG gave a temporary boost for Boeing at the Paris Airshow, otherwise Boeing wouldn’t have cross the order for 100 planes mark.
IAG succeeded by getting 200 planes at a bargain (normally airlines get discounted price, in this case would have been a lot) if 737 MAX get back in the air with global regulators approval. At the same time, if MAX failed to gain control, then IAG can walkaway without losing anything.
Traditionally, IAG uses Airbus on short-haul routes and Boeing for long-haul, but this deal would change it.
The 200 planes at $24 at list prices is a big confidence boost to Boeing, and it will win only when the order is firmed…
IAG owns Aer Lingus, British Airways, Iberia, Level and Vueling
Did IAG made the right decision ?