BA Boeing Co

British Air parent to buy up to 200 jets, first sales since grounding after fatal crashes

By Robert Wall and Andrew Tangel 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (June 19, 2019).

LE BOURGET, France -- Boeing Co. won a landmark 737 MAX order from British Airways parent IAG on Tuesday, ending a sales drought in the wake of the grounding of the aircraft following two fatal crashes.

International Consolidated Airlines Group SA, as IAG is formally known, said at the Paris Air Show it had signed a letter of intent for up to 200 Boeing 737 MAX planes. It would buy the 737 MAX 8, the model that crashed in October and March, as well as the larger 737 MAX 10.

"Looking into the future, we recognize this is a great aircraft," said IAG Chief Executive Willie Walsh. Mr. Walsh, a 737 pilot early in his career, recently flew a MAX simulator to assess the flight-control change that Boeing has proposed to address issues identified in the crashes.

Mr. Walsh said he tested the original flight-control system and the upgrade. "It was a very helpful exercise. It gave me confidence both in the aircraft and the changes" proposed by Boeing, he said.

The deal is the biggest vote of confidence in the beleaguered plane since its grounding more than three months ago.

The plane will be operated by British Airways and IAG budget units Level and Vueling, Mr. Walsh said.

IAG's commitment to the jet comes as regulators are getting ready to test fly Boeing's MAX flight-control-system fix. The assessment is a critical step for them to decide when the MAX can resume flying passengers.

Some U.S. pilots say that more still needs to be done to make sure pilots are trained to fly the MAX safely. "We remained concerned about whether the new training protocol, materials and method of instruction suggested by Boeing are adequate," said Dan Carey, president of the union that represents pilots at American Airlines Group Inc., in testimony prepared for a hearing being held Wednesday by the aviation subcommittee of the House Committee on Transportation and Infrastructure.

Boeing also secured a commitment from Korean Air Lines Co. and Air Lease Corp. to buy 787 Dreamliners.

Boeing entered this week's Paris Air Show in an unusual situation. The U.S. plane maker had racked up 125 more cancellations than new orders for this year, reflecting few bookings and a raft of canceled orders, including from India's financially struggling Jet Airways.

The plane maker failed to win any new orders in April or May. Air New Zealand Ltd. said last month it would buy eight 787-10 Dreamliners, but the deal wasn't finalized.

The biennial Paris Air Show is typically a place for plane producers to showcase new products and book large airliner orders.

However, this year Boeing has had to balance that with handling the fallout of the two 737 MAX crashes, which killed a total of 346 people.

Boeing said on Tuesday that Korean Air would deploy 20 of the largest version of the Dreamliner, the 787-10, and 10 slightly smaller 787-9s. The deal has a value of $6.3 billion before industry-standard discounts. Some of the planes are being acquired by plane-rental firm Air Lease and placed with the Asian carrier.

Air Lease separately ordered five 787-9s at a prediscount price of $1.5 billion.

Rival Airbus SE continued its order haul, including for its newly launched A321XLR, introduced at the air show on Monday.

IAG, which has long signaled interest in the Airbus model to fly trans-Atlantic routes, said on Tuesday it was ordering 14 A321XLRs, six for Irish unit Aer Lingus and eight for Spain's Iberia.

Both carriers would open new trans-Atlantic routes, IAG said.

Philippine budget carrier Cebu Pacific ordered 10 of the new Airbus planes, with first delivery in 2024, along with 16 of the wide-body A330-900s and five A320neo single-aisle jets.

Saudi Arabian Airlines added to an earlier A320neo deal, taking as many as 100 of the planes, including 15 of the A321XLR.

Delta Air Lines Inc. also topped up its commitment for Airbus A220 planes, ordering five more of the jets.

--Alison Sider contributed to this article.

Write to Robert Wall at robert.wall@wsj.com and Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

June 19, 2019 02:47 ET (06:47 GMT)

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