Posted on: 25 June 2019 by Glenn Sands
At the PAS19, International Airlines Group (IAG) signed a LOI for 200 737 MAXs. It was the largest order announced during the week-long air show. Following the announcement Airbus has revealed that it did not receive a call for tender from IAG, the Toulouse-based manufacturer is now seeking to win back IAG’s business by making an offer of its own, using its A320 family of aircraft.
“We would like a chance to compete for that business,” chief commercial officer Christian Scherer told the media, adding that IAG had not issued a formal tender for the narrow-body order.
The deal is valued at more than US$24 billion at list prices and is the first significant order for a commercial aircraft received by Boeing since the MAX grounding.
Guillaume Faury, Airbus chief executive, added: “We hear it’s a letter of intention. We will be very happy to compete when it comes to tender for this large number of planes.”
The potential deal has attracted a lot of criticism from across the industry as well. The IAG is being viewed as in a ‘win, win’ situation. If the group decides to cancel the deal it can simply walk away, with no negative impact to itself. If the agreement is signed, it’s presumed that IAG will acquire the 200 aircraft at a significantly reduced price, due to the current grounding in place.
Many in the industry believe that the IAG’s LOI with Boeing allows the group to keep the competition alive between Airbus and Boeing and may allow IAG to seek better deals in the future from either aircraft manufacturer.