grbauc
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 6:39 am

Olddog wrote:
The fact he needs to defend that order tells all you need to know.



no the fact is many decisions have to be explained. A lot of it is the Reporters of today are not has experienced and well schooled. That might be some part of it.
 
jeffrey0032j
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 7:24 am

Some here have compared the duration of the Airbus delays and the magnitude and duration of the Max groundings. This is missing the point, I would interpret it as WW being unhappy with the way Airbus dealt with their delays vs Boeing. He had issues with both the A320neo and 787 at the same time, and Boeing possibly shown that they had handled it better despite it being an RR issue.
 
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MrBren
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 7:31 am

Ordering a plane with no airworthiness is just a stupid move.
 
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Dutchy
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 8:07 am

jeffrey0032j wrote:
Some here have compared the duration of the Airbus delays and the magnitude and duration of the Max groundings. This is missing the point, I would interpret it as WW being unhappy with the way Airbus dealt with their delays vs Boeing. He had issues with both the A320neo and 787 at the same time, and Boeing possibly shown that they had handled it better despite it being an RR issue.


I think it is neither. It all boils down to price, the MAX and NEO's are very competitive and in order to have IAG switch like this, the MAX-es needed to overcome quite a financial gap and apparently it did. It is a business decision, nothing more. All other things are storytelling. Hopefully, this Ceo has more class than a certain Irish CEO a while back.
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seahawk
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 8:16 am

SEU wrote:
So they buy a plane that is grounded because the competition is slightly delayed.......thats like buying a heater because its too hot.


Just without any risk for IAG. Airbus does not have the delivery slots to match the delivery schedule Boeing could promise for the MAX. If Boeing can make the promise will become obvious soon and then it will either become an fixed order or IAG will buy A320s.

But considering how strong the duopol has become, I expect many airlines to fly 737 and A320 as well as 787/77 and A350s, because the only competition is now between Airbus and Boeing and if you are locked in with one supplier, you do not get the price you want. I expect LH to take the MAX as well when they top of the single aisle orders next year.
Last edited by seahawk on Sat Jul 13, 2019 8:21 am, edited 1 time in total.
 
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glideslope
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 8:29 am

Sooner787 wrote:
bgm wrote:
enilria wrote:
Ironic reasons given the mess with the MAX.


Indeed. To order such a dubious aircraft would require some serious discounts.

The A320NEO is currently flying all over the world. The 737 MAX is just filling up parking lots with lots of angry customers.


Not so long ago, Airbus had quite a glider collection piled up at Toulouse themselves,
so Airbus has been wise not to "scoreboard" over the 737 mess


Quite correct. NEO deliveries are not getting any quicker with the continuing GTF and LEAP-1A design and production challenges.
To know your Enemy, you must become your Enemy.” Sun Tzu
 
Virtual737
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 8:32 am

Cunard wrote:
I just don't understand the backlashing here on a.net of Willie Walsh, why exactly is that the case?

Is it because some don't like success or for that matter successful people?

Willie Walsh has been a superb CEO of British Airways and is an excellent CEO of the International Airlines Group and he will no doubt go down in history as being one of best if not the best CEO's British Airways has ever had, and I'm old enough to remember everyone of them unlike many on here.

The overall changes he made at British Airways we're essential to make the airline more competitive, Willie Walsh is a totally competent person who knows the aviation industry from top to bottom and he has a proven record at Aer Lingus as well as at British Airways and now at IAG.

With record profits British Airways is in a much better situation thanks to Willie Walsh.

But then there are those armchair CEO's here on a.net who seem to think that they know better!


From a commercial point of view he's done a fantastic job.

From a customer point of view, "The World's Favourite Airline" is now an LCC or "Legacy Cost Carrier".

In some ways he has done to BA what equity release companies do to home owners. He has given them something in the short term but taken more away in the longer term. ie the once priceless brand is now just synonymous with average service on an average carrier. This of course is just my opinion.
 
bhxalex
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:04 am

This MAX order has been nothing but a PR disaster for IAG. Any more setbacks with the MAX and heads will roll at IAG for this order.
 
RickNRoll
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:13 am

glideslope wrote:
Sooner787 wrote:
bgm wrote:

Indeed. To order such a dubious aircraft would require some serious discounts.

The A320NEO is currently flying all over the world. The 737 MAX is just filling up parking lots with lots of angry customers.


Not so long ago, Airbus had quite a glider collection piled up at Toulouse themselves,
so Airbus has been wise not to "scoreboard" over the 737 mess


Quite correct. NEO deliveries are not getting any quicker with the continuing GTF and LEAP-1A design and production challenges.


Now that there are no MAX engines to deliver maybe GE can concentrate on the LEAP-1A for a while.
 
VV
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:15 am

MrBren wrote:
Ordering a plane with no airworthiness is just a stupid move.


Yeah, like ordering aircraft that are still in project.
 
VV
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:17 am

goosebayguy wrote:
SO a 70 day delay by Airbus (Due to engine delays) is not good compared to an unlimited delay getting the MAX flying again? STrange times we live in.


Does anyone know the agreed delivery schedule for this LoI for MAX?
 
bennett123
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:27 am

Iirc, Oscar said that he would be on the first UA flight with the MAX.

That is good enough for me.
 
senatorflyer
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:33 am

I honestly don’t understand this WW bashing. He turned IB and BA around and both carriers improved overall in services and certainly from a financial point of view over the years. IB/BA are certainly not perfect but neither is the European competition. And tbh, the free catering on BA intra Europe flights was actually rubbish.

Now to the LOI for the 737. I personally don’t think IAG will take those aircraft. Boeing just won a maintenance contract for IAG, I’d imagine WW got a decent deal on that one for doing a favour. IAG is not known for replacing aircraft that quickly. However, the only reason I could see IAG taking deliveries is, if this will be their insurance policy to be ready for the Heathrow expansion.
 
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:36 am

VV wrote:
goosebayguy wrote:
SO a 70 day delay by Airbus (Due to engine delays) is not good compared to an unlimited delay getting the MAX flying again? STrange times we live in.


Does anyone know the agreed delivery schedule for this LoI for MAX?


Between 2023-2027 which is why I’ve said across multiple threads this order has nothing to do with the cancelled Jet order
Must think up a new one soon, slow moving brain trying to get into gear ;)
 
VV
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:36 am

senatorflyer wrote:
...

Now to the LOI for the 737. I personally don’t think IAG will take those aircraft. Boeing just won a maintenance contract for IAG, I’d imagine WW got a decent deal on that one for doing a favour. IAG is not known for replacing aircraft that quickly. However, the only reason I could see IAG taking deliveries is, if this will be their insurance policy to be ready for the Heathrow expansion.


Do you mean they would flip again if Airbus proposes them an even more interesting deal?
 
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Faro
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:40 am

airbazar wrote:
What else is he going to say? We don't really like the MAX but Boeing gave us a price we couldn't refuse?



:checkmark: :checkmark:

Exactly...he just came up with any random reason...would have been better not to say anything at all...

Although in all fairness...I am sure the MAX will be as safe as any other frame once Boeing is done with their fixes...

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VV
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 9:54 am

mwhcvt wrote:
VV wrote:
goosebayguy wrote:
SO a 70 day delay by Airbus (Due to engine delays) is not good compared to an unlimited delay getting the MAX flying again? STrange times we live in.


Does anyone know the agreed delivery schedule for this LoI for MAX?


Between 2023-2027 which is why I’ve said across multiple threads this order has nothing to do with the cancelled Jet order


Perhaps the hypothetical cancelled order or MoU or LoI was also for the same period.

It could potentially be the case.
 
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 10:02 am

VV wrote:
mwhcvt wrote:
VV wrote:

Does anyone know the agreed delivery schedule for this LoI for MAX?


Between 2023-2027 which is why I’ve said across multiple threads this order has nothing to do with the cancelled Jet order


Perhaps the hypothetical cancelled order or MoU or LoI was also for the same period.

It could potentially be the case.


Jet had already taken 8 max jets from their order and there’s even fully painted frames sat in the Boeing parking lots, lots of the MAX jet had on order would have been delivered long before IAGs frames start to roll out of the factory door
Must think up a new one soon, slow moving brain trying to get into gear ;)
 
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JerseyFlyer
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 10:50 am

It is quite clear that three factors fed into the IAG decision:

1 price - in view of Boeing's currently weak position on the MAX
2 strategic diversification from a single narrowbody supplier
3 a message to Airbus that IAG are not happy with some aspects of their relationship. Certainly the neo delays, maybe uncertainty / over-promising around those delays, and maybe also pricing on both narrow and wide bodies (publicly stated by WW earlier, in relation to a potential top-up A380 order)
 
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 11:15 am

VV wrote:
senatorflyer wrote:
...

Now to the LOI for the 737. I personally don’t think IAG will take those aircraft. Boeing just won a maintenance contract for IAG, I’d imagine WW got a decent deal on that one for doing a favour. IAG is not known for replacing aircraft that quickly. However, the only reason I could see IAG taking deliveries is, if this will be their insurance policy to be ready for the Heathrow expansion.


Do you mean they would flip again if Airbus proposes them an even more interesting deal?


Perhaps, perhaps not. We don’t know. But one thing is for sure, the IAG board would need to sign off the deal before it becomes an order. I do believe it will be difficult to sell the idea of ‘we need 200 new jets’ while there is economical uncertainty around Brexit. BA had this issue once before when the A320 family were delivered before and after 9/11. Wasn’t pretty for them financially...
 
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 12:05 pm

Revelation wrote:
rbavfan wrote:
Revelation wrote:
I think he was referring to the mess with A32x, GTF and LEAP-1A production.

As opposed to the 737Max units without engines & delayed due to production issues with the Leap-1B. Which BTW are based on the Leap-1A.

The facts show that IAG is ordering 737s in 2019 for 2023 delivery due to Airbus delivery delays in 2019 and earlier.

Actually, the facts show IAG has executed a LOI covering up to 200 737's, for possible delivery from 2023 onwards.
 
oceanvikram
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 12:05 pm

This has been one of the best, respectful and mature discussion I have read in this forum for a while (The good “old” days of airliners.net).

All of the points in this discussion makes a lot of logical and rational sense to me without being a fly in the board room when the decision was made, hell I would love to get my hands on the minutes of meeting or power point presentation.

I would like to add another point for consideration … this LOI must have been influenced by 3rd parties. They could be, but not limited to:
McKinsey
BCG
Bain
Goldman Sachs
JP Morgan
Barclays
EY
PWC
KPMG
Deloitte

For a 200 aircraft order, I doubt the decision was solely motivated within the ranks of IAG.
My comments are based as an aviation enthusiast first, then as a passenger who paid for his own ticket, after that a passenger on a business trip and finally an armchair CEO.
 
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 12:12 pm

glideslope wrote:
Sooner787 wrote:
bgm wrote:

Indeed. To order such a dubious aircraft would require some serious discounts.

The A320NEO is currently flying all over the world. The 737 MAX is just filling up parking lots with lots of angry customers.


Not so long ago, Airbus had quite a glider collection piled up at Toulouse themselves,
so Airbus has been wise not to "scoreboard" over the 737 mess


Quite correct. NEO deliveries are not getting any quicker with the continuing GTF and LEAP-1A design and production challenges.

Not quicker? There were 234 NEOs delivered this year till June. This more than double compared to the 110 last year.
MAX dropped from 89 to 57 with no deliveries in Q2.

There are good reasons to go for at least 2 suppliers and the MAX grounding is clearly showing it, but WW timing and reasoning is maybe excellent to get a great deal and important for Boeing far future but publicity is of course a disaster.
I wonder why WW acts so unprofessional?
Doing this deal is one thing, but to defend it so bad in public? 70days vs. a half year fleet grounding is not really a well chosen argument.
 
Antarius
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 12:49 pm

sciing wrote:
glideslope wrote:
Sooner787 wrote:

Not so long ago, Airbus had quite a glider collection piled up at Toulouse themselves,
so Airbus has been wise not to "scoreboard" over the 737 mess


Quite correct. NEO deliveries are not getting any quicker with the continuing GTF and LEAP-1A design and production challenges.

Not quicker? There were 234 NEOs delivered this year till June. This more than double compared to the 110 last year.
MAX dropped from 89 to 57 with no deliveries in Q2.

There are good reasons to go for at least 2 suppliers and the MAX grounding is clearly showing it, but WW timing and reasoning is maybe excellent to get a great deal and important for Boeing far future but publicity is of course a disaster.
I wonder why WW acts so unprofessional?
Doing this deal is one thing, but to defend it so bad in public? 70days vs. a half year fleet grounding is not really a well chosen argument.


What is clear is that WW and actual airline leadership (save for some like AAB) do not keep ticky tacky lists like this. They make decisions based on their need, availability and finances.

WW doesnt care about how many aircraft A or B delivered. They care about what affects them. And apparently, the status quo was not sufficient.
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 2:25 pm

I am surprised nobody is discussing the strategic implications. Adding 200 aircraft to the IAG fleets gives them a lot of options. In hindsight it may turn out like Bob Crandall‘s massive MD80 order after he got his B scales (keep in mind that Luftie and AF-KLM are constrained by unions on their low cost growth while BA and Iberia employees have accepted IAG‘s absolute right to set up new airlines). 200 aircraft is half a new Ryanair hitting Europe with Luftie and AF-KLM unable to really respond... very shrewd move
 
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 2:51 pm

ShamrockBoi330 wrote:
SEPilot wrote:
When the herd goes all in one direction, there often is great opportunity in going against the flow. I am completely confident that WW got the deal of a lifetime. He knows, as do all reasonable observers, that the MAX WILL be cleared and go on to be a very successful airliner. He made a very smart move.


If he got better than Ryanair, dont Boeing have to compensate under best deal clause similar to Southwest's? Or how true is this?

But if true, does this really make sense for Boeing, or was the deal just not as good as everyone believes??

but then if that's the case he's answerable to BoD and Shareholders for not getting best deal, value for shareholders etc etc??


Would it have been impossible for WN to have told Boeing to go ahead and offer MAXs at a the needed price to ensure the health of the MAX program? I don't think that would raise legal problems but don't know.
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JetBuddy
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 2:59 pm

I don't think this massive order for 737 MAX is that strange.

IAG wants to diversify their narrowbody fleet:

1. This means faster access to new planes.
2. Less risk if something happens to one of them (like the grounding of the MAX)
3. Economics of scale and commonality works as long as each fleet is of substantial size
4. Nobody wants a monopoly. Monopoly is poison for the market economy and means higher prices and less innovation
5. Ordering 737 MAX at this time gives a huge boost of moral and lifts the spirit of Boeing workers to solve the issues they're facing.
6. At the same time it keeps Airbus from resting on their laurels.
7. Pricing. There's no doubt in anybody's mind that IAG got a very competitive price offering.
8. The 737 MAX will fly again. The question is when. Either way - when IAGs delivery schedule begins the MAX will have already been back in the air for a while.
9. Having both Airbus A320 series and Boeing 737 series planes gives IAG route planners the option to schedule the best aircraft for each route. Much like Delta is doing.
 
blueflyer
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 3:20 pm

mjdemain wrote:
WW likely got a killer deal for IAG and wanted to remind Airbus that they’re not the only game in town anymore.

I think there was a lot of that in the announcement, or perhaps Boeing demanded a public release in exchange for the price BA negotiated. I don't find the timing of the order unusual, it is the timing of the reveal of the order that is... At the same time, that the CEO has to come out and defend the order perhaps indicates the backlash was more than BA had anticipated.

goosebayguy wrote:
SO a 70 day delay by Airbus (Due to engine delays) is not good compared to an unlimited delay getting the MAX flying again? STrange times we live in.

Chronic delays vs one-off. I'd take the one-off, especially if all expectations are it will be resolved by the time my order is ready...
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 4:14 pm

Revelation wrote:
enilria wrote:
Ironic reasons given the mess with the MAX.

I think he was referring to the mess with A32x, GTF and LEAP-1A production.

Agreed. Pratt is doing better, but has to prove themselves. GE must fix the combustor issue and get the backlog fixed. MAX production dropped on lack of LEAP engines.

The supply chain is stretched. It will get worse when the transition to CMCs happens. I say worse as new material production yield is low and takes typically 5 years to work out.

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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 4:51 pm

smartplane wrote:
Revelation wrote:
The facts show that IAG is ordering 737s in 2019 for 2023 delivery due to Airbus delivery delays in 2019 and earlier.

Actually, the facts show IAG has executed a LOI covering up to 200 737's, for possible delivery from 2023 onwards.

True, facts are facts.

Meanwhile the fine article reports:

While Airbus has pledged to compete for IAG’s order, announced as a letter of intent and not yet part of Boeing’s official backlog, Walsh said he fully intends to sign off on the deal and won’t be approaching the European manufacturer, adding that he doesn’t want to be “solely dependent” on one company for his group’s entire narrow-body fleet.

Some engagements don't end up in marriages, but most do.

JetBuddy wrote:
I don't think this massive order for 737 MAX is that strange.

IAG wants to diversify their narrowbody fleet:

1. This means faster access to new planes.
2. Less risk if something happens to one of them (like the grounding of the MAX)
3. Economics of scale and commonality works as long as each fleet is of substantial size
4. Nobody wants a monopoly. Monopoly is poison for the market economy and means higher prices and less innovation
5. Ordering 737 MAX at this time gives a huge boost of moral and lifts the spirit of Boeing workers to solve the issues they're facing.
6. At the same time it keeps Airbus from resting on their laurels.
7. Pricing. There's no doubt in anybody's mind that IAG got a very competitive price offering.
8. The 737 MAX will fly again. The question is when. Either way - when IAGs delivery schedule begins the MAX will have already been back in the air for a while.
9. Having both Airbus A320 series and Boeing 737 series planes gives IAG route planners the option to schedule the best aircraft for each route. Much like Delta is doing.

And believe it or not, 737s have better operating economics on some routes as compared to the competitor's offering. The smaller engines on 737s are lighter. The shorter landing gear are lighter. The wing itself is newer. The wings tank more fuel which can avoid the use of ACTs. Check out where AS bought VA and found specific roles for A320s vs 737s. It happens throughout the industry for those companies willing to operate mixed fleet.
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sciing
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 5:21 pm

Antarius wrote:
sciing wrote:
glideslope wrote:

Quite correct. NEO deliveries are not getting any quicker with the continuing GTF and LEAP-1A design and production challenges.

Not quicker? There were 234 NEOs delivered this year till June. This more than double compared to the 110 last year.
MAX dropped from 89 to 57 with no deliveries in Q2.

There are good reasons to go for at least 2 suppliers and the MAX grounding is clearly showing it, but WW timing and reasoning is maybe excellent to get a great deal and important for Boeing far future but publicity is of course a disaster.
I wonder why WW acts so unprofessional?
Doing this deal is one thing, but to defend it so bad in public? 70days vs. a half year fleet grounding is not really a well chosen argument.


What is clear is that WW and actual airline leadership (save for some like AAB) do not keep ticky tacky lists like this. They make decisions based on their need, availability and finances.

WW doesnt care about how many aircraft A or B delivered. They care about what affects them. And apparently, the status quo was not sufficient.

Likely, but why does WW present a nonsense arguments. Why does he attack Airbus for almost nothing compared to the issue Boeing has? Why does defend the decision in such stupid way?
This is simply unprofessional, not the decision itself.
 
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 6:50 pm

sciing wrote:
Antarius wrote:
sciing wrote:
Not quicker? There were 234 NEOs delivered this year till June. This more than double compared to the 110 last year.
MAX dropped from 89 to 57 with no deliveries in Q2.

There are good reasons to go for at least 2 suppliers and the MAX grounding is clearly showing it, but WW timing and reasoning is maybe excellent to get a great deal and important for Boeing far future but publicity is of course a disaster.
I wonder why WW acts so unprofessional?
Doing this deal is one thing, but to defend it so bad in public? 70days vs. a half year fleet grounding is not really a well chosen argument.


What is clear is that WW and actual airline leadership (save for some like AAB) do not keep ticky tacky lists like this. They make decisions based on their need, availability and finances.

WW doesnt care about how many aircraft A or B delivered. They care about what affects them. And apparently, the status quo was not sufficient.

Likely, but why does WW present a nonsense arguments. Why does he attack Airbus for almost nothing compared to the issue Boeing has? Why does defend the decision in such stupid way?
This is simply unprofessional, not the decision itself.


Because it isnt a contest in a vacuum. IAG does not have any MAX aircraft now, so the grounding is meaningless to them (albeit the situation is likely beneficial to them from a deal standpoint as a result)

His point is simple - Airbus, step it up. In 3 years, if the situation is reversed, I fully expect WW to tell Boeing to get their shit in line.

There is this weird a.net perception that the 737 is a worthless aircraft (despite over 10,000 ordered) and therefore anyone who orders it must be making up reasons, lying, stupid etc. Maybe it just makes sense for some people, just like the 320 series makes tons of sense for others. And for some, both.
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SEU
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 7:25 pm

I am sorry, but anyone making anything else up is having the wool pulled over their eyes.

Businessmen dont have sediment, they dont have personal relationships with each other, everything is business.

Boeing needed some good news, gave IAG a great deal. IAG did the maths, will the 737 MAX make them money at that price with everything taken into account? Yes?

They ordered it because the price was right and it will make them money, nothing more, nothing less. They only did a LOI as well, so if the MAX continues to have issues, its an easy get out.
 
VV
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sat Jul 13, 2019 7:31 pm

SEU wrote:
I am sorry, but anyone making anything else up is having the wool pulled over their eyes.

Businessmen dont have sediment, they dont have personal relationships with each other, everything is business.

Boeing needed some good news, gave IAG a great deal. IAG did the maths, will the 737 MAX make them money at that price with everything taken into account? Yes?

They ordered it because the price was right and it will make them money, nothing more, nothing less. They only did a LOI as well, so if the MAX continues to have issues, its an easy get out.


This is way beyond pricing issue.
 
Cunard
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 12:34 am

rigo wrote:
Cunard wrote:
I just don't understand the backlashing here on a.net of Willie Walsh, why exactly is that the case?

Is it because some don't like success or for that matter successful people?

Willie Walsh has been a superb CEO of British Airways and is an excellent CEO of the International Airlines Group and he will no doubt go down in history as being one of best if not the best CEO's British Airways has ever had, and I'm old enough to remember everyone of them unlike many on here.

The overall changes he made at British Airways we're essential to make the airline more competitive, Willie Walsh is a totally competent person who knows the aviation industry from top to bottom and he has a proven record at Aer Lingus as well as at British Airways and now at IAG.

With record profits British Airways is in a much better situation thanks to Willie Walsh.

But then there are those armchair CEO's here on a.net who seem to think that they know better!


People just don't like the MAX. Walsh ordered it so they bash him for that.


The continuous backlashing of Willie Walsh here on a.net has absolutely nothing to do with IAG ordering the MAX none whatsoever!

The backlashing of Willie Walsh here on a.net has been a continuous thing long before the LOI for the MAX.

Whenever there is a thread started here on a.net regarding British Airways or IAG there are always certain individuals who want to diss Willie Walsh.

I personally find it pathetic and if you've been taking attention and had read those threads yourself your know exactly what I mean!
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garpd
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 12:36 am

sciing wrote:
Likely, but why does WW present a nonsense arguments. Why does he attack Airbus for almost nothing compared to the issue Boeing has? Why does defend the decision in such stupid way?
This is simply unprofessional, not the decision itself.


Because Airbus are not the "can do no wrong" saints everyone here paints them to be. They can be extremely exhausting to deal with at times. "Arrogance, inflexibility, disinterest"; three words I've heard come up in conversations with friends that have to deal with Airbus on multiple levels over the years. Not all the time, mind you.

Perhaps WW just got fed up with that? Anyway, what WW said is pretty tame and seems genuine. I've read far more scathing comments about Boeing or Airbus from other CEOs. Al Baker is not one to withhold his true feelings about a situation, for example.
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Cunard
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 12:57 am

KingOrGod wrote:
Cunard wrote:
I just don't understand the backlashing here on a.net of Willie Walsh, why exactly is that the case?

Is it because some don't like success or for that matter successful people?

Willie Walsh has been a superb CEO of British Airways and is an excellent CEO of the International Airlines Group and he will no doubt go down in history as being one of best if not the best CEO's British Airways has ever had, and I'm old enough to remember everyone of them unlike many on here.

The overall changes he made at British Airways we're essential to make the airline more competitive, Willie Walsh is a totally competent person who knows the aviation industry from top to bottom and he has a proven record at Aer Lingus as well as at British Airways and now at IAG.

With record profits British Airways is in a much better situation thanks to Willie Walsh.

But then there are those armchair CEO's here on a.net who seem to think that they know better!


And at an all time low as far as pax are concerned.

I don't get the obsession with screwing the pax into oblivion to turn more (read: record) profit. Same with LH. Corners are cut everywhere but, we. must. make. MORE. profit.


I'm a British Airways frequent flyer and a proud British Airways Executive Club Member and even though British Airways have cut corners and scaled back on the overall service levels the airline is still excellent in what it does and the changes are rather small in the grand scale of things so in that respect I'm not one of those who personally complain about the airline.

All time low as far as pax are concerned, well as much as I appreciate that but British Airways carried 45 million passengers per annum with profits up by 9.8% the airline must be doing something right.

But..we.. must.. make..MORE.. profit.....

Of course they NEED to make profit just like any other business. Take into account ever rising fuel costs, fluctuations in the foreign exchange market, geopolitics, staffing costs including uniforms, pensions, investment in new very expensive aircraft, cost of upgrading the current fleet, ground equipment, fleet maintenance, insurance......the list could go on and on and your doubting why they must MAKE profit!

All we need is another war or a SARS related incident and your see that profile that British Airways has accumulated disappear into nothing.

You obviously have no understanding of business!
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lightsaber
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 1:54 am

Revelation wrote:
smartplane wrote:
Revelation wrote:
The facts show that IAG is ordering 737s in 2019 for 2023 delivery due to Airbus delivery delays in 2019 and earlier.

Actually, the facts show IAG has executed a LOI covering up to 200 737's, for possible delivery from 2023 onwards.

True, facts are facts.

Meanwhile the fine article reports:

While Airbus has pledged to compete for IAG’s order, announced as a letter of intent and not yet part of Boeing’s official backlog, Walsh said he fully intends to sign off on the deal and won’t be approaching the European manufacturer, adding that he doesn’t want to be “solely dependent” on one company for his group’s entire narrow-body fleet.

Some engagements don't end up in marriages, but most do.

JetBuddy wrote:
I don't think this massive order for 737 MAX is that strange.

IAG wants to diversify their narrowbody fleet:

1. This means faster access to new planes.
2. Less risk if something happens to one of them (like the grounding of the MAX)
3. Economics of scale and commonality works as long as each fleet is of substantial size
4. Nobody wants a monopoly. Monopoly is poison for the market economy and means higher prices and less innovation
5. Ordering 737 MAX at this time gives a huge boost of moral and lifts the spirit of Boeing workers to solve the issues they're facing.
6. At the same time it keeps Airbus from resting on their laurels.
7. Pricing. There's no doubt in anybody's mind that IAG got a very competitive price offering.
8. The 737 MAX will fly again. The question is when. Either way - when IAGs delivery schedule begins the MAX will have already been back in the air for a while. B
9. Having both Airbus A320 series and Boeing 737 series planes gives IAG route planners the option to schedule the best aircraft for each route. Much like Delta is doing.

And believe it or not, 737s have better operating economics on some routes as compared to the competitor's offering. The smaller engines on 737s are lighter. The shorter landing gear are lighter. The wing itself is newer. The wings tank more fuel which can avoid the use of ACTs. Check out where AS bought VA and found specific roles for A320s vs 737s. It happens throughout the industry for those companies willing to operate mixed fleet.

Wow.. I"m agreeing with you too much lately.

The MAX engines are optimized, per my estimate for 75 minute flights. Limited by feasible diameter of the engine. But we'll optimized for the 738 airframe.

Airbus demanded 2 hour optimization. Because of the known demand for the A321, the engines are effectively optimized for a much larger than the A320 airframe (hurts climb fuel burn even more). The A320 requires an ACT for some missions (a cost).

Aircraft have fixed and variable costs. Every airline/route structure has a different optimum.

It seems as if an airline doing lots of flights from the UK to Germany, France, and Spain is doing well with 738s. Plus those domestic flights.

The 737 is certified for 110,000 cycles vs. 60,000 FC might be able to stretch maintenance to save a little. (Flight hours are so close to not being worth discussing). Most A320, from what I recall, will retire on hours.

So Boeing will win some and Airbus others. This grounding will end.

Lightsaber
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sciing
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 7:42 am

garpd wrote:
sciing wrote:
Likely, but why does WW present a nonsense arguments. Why does he attack Airbus for almost nothing compared to the issue Boeing has? Why does defend the decision in such stupid way?
This is simply unprofessional, not the decision itself.


Because Airbus are not the "can do no wrong" saints everyone here paints them to be. They can be extremely exhausting to deal with at times. "Arrogance, inflexibility, disinterest"; three words I've heard come up in conversations with friends that have to deal with Airbus on multiple levels over the years. Not all the time, mind you.

Perhaps WW just got fed up with that? Anyway, what WW said is pretty tame and seems genuine. I've read far more scathing comments about Boeing or Airbus from other CEOs. Al Baker is not one to withhold his true feelings about a situation, for example.

Yes, AAB is clearly a bad example of professional communication.
So everything he says is not worth to be commented also you can simply not trust him.
Copying AAB is a very strange strategy as CEO.
So sorry, but WW deserves these bashing.
 
KingOrGod
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 8:23 am

Cunard wrote:
KingOrGod wrote:
Cunard wrote:
I just don't understand the backlashing here on a.net of Willie Walsh, why exactly is that the case?

Is it because some don't like success or for that matter successful people?

Willie Walsh has been a superb CEO of British Airways and is an excellent CEO of the International Airlines Group and he will no doubt go down in history as being one of best if not the best CEO's British Airways has ever had, and I'm old enough to remember everyone of them unlike many on here.

The overall changes he made at British Airways we're essential to make the airline more competitive, Willie Walsh is a totally competent person who knows the aviation industry from top to bottom and he has a proven record at Aer Lingus as well as at British Airways and now at IAG.

With record profits British Airways is in a much better situation thanks to Willie Walsh.

But then there are those armchair CEO's here on a.net who seem to think that they know better!


And at an all time low as far as pax are concerned.

I don't get the obsession with screwing the pax into oblivion to turn more (read: record) profit. Same with LH. Corners are cut everywhere but, we. must. make. MORE. profit.


I'm a British Airways frequent flyer and a proud British Airways Executive Club Member and even though British Airways have cut corners and scaled back on the overall service levels the airline is still excellent in what it does and the changes are rather small in the grand scale of things so in that respect I'm not one of those who personally complain about the airline.

All time low as far as pax are concerned, well as much as I appreciate that but British Airways carried 45 million passengers per annum with profits up by 9.8% the airline must be doing something right.

But..we.. must.. make..MORE.. profit.....

Of course they NEED to make profit just like any other business. Take into account ever rising fuel costs, fluctuations in the foreign exchange market, geopolitics, staffing costs including uniforms, pensions, investment in new very expensive aircraft, cost of upgrading the current fleet, ground equipment, fleet maintenance, insurance......the list could go on and on and your doubting why they must MAKE profit!

All we need is another war or a SARS related incident and your see that profile that British Airways has accumulated disappear into nothing.

You obviously have no understanding of business!


No need to get personal. Maybe you can't handle criticism of your pet airline.

I *was* also a BA frequent flier, and sorry to say, I disagree with you based on my airport and on-board experiences.

Of course profit is important, I am not retarded. I'll bite and write it clearer instead of being insulting like you were: MORE profit at what cost. Operative word being MORE. I even caps'ed it. Again.

I don't book BA for any long-haul anymore and have no plan to resume, and use airlines for short-haul based solely on schedule.

Anyway, this has Nothing to do with max anymore, suffice to say I'll choose shorthaul now based on equipment, (ie: no max) then schedule.
 
lhrnue
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 11:35 am

I am a frequent flyer with BA as I just live between Heathrow and Gatwick. This will change as soon as a route I want to get on is served by a MAX. I will not put my family in a MAX.
 
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garpd
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 11:39 am

lhrnue wrote:
I am a frequent flyer with BA as I just live between Heathrow and Gatwick. This will change as soon as a route I want to get on is served by a MAX. I will not put my family in a MAX.
Once back in operation, I won't have a problem flying on one, knowing it's the most scrutinised airframe in operation. As that's what it'll be. Every single fix will be thoroughly tested, verified, reviewed by numerous agencies and tested again several more times for good measure.
Last edited by garpd on Sun Jul 14, 2019 11:52 am, edited 1 time in total.
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Revelation
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 2:05 pm

lightsaber wrote:
Wow.. I"m agreeing with you too much lately.

It's a sign I'm learning something after 14 years on a.net! :-)

Without going too far OT, I found it interesting that AS put the 737 on the longer east-west routes whereas kept the A320s on the north/south mostly west coast routes. I wonder what drove that decision.
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Faro
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 2:11 pm

MrBren wrote:
Ordering a plane with no airworthiness is just a stupid move.



Ordering a plane with over half a trillion USD in orders is much less so...Boeing, the FAA, CFM, the state of Washington, the Federal Government and everybody and their uncle will make sure that the MAX is safely certified...have no doubt about that...


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par13del
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 2:12 pm

Fuel based diversions when the winds get "bad", it has been thus for a while, see JetBlue and AA etc. with their transcons and 737's versus A320's.
To stir the pot, the additional comfort of the wider A32X on long flights did not win the day.
 
WBM
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 5:44 pm

lhrnue wrote:
I am a frequent flyer with BA as I just live between Heathrow and Gatwick. This will change as soon as a route I want to get on is served by a MAX. I will not put my family in a MAX.


To each their own I guess. Personally if I had the chance I would be happy to fly on the MAX with my family tomorrow. Other things I’ve done with my family include white water rafting, skiing, a plane ride on small airplane, swimming, bike rides, hikes in wilderness areas, and rides in a car. My best estimate is that a flight on a MAX ranks somewhere between about as dangerous, to way less dangerous than each of those activities. By the time I actually get the chance to fly on a MAX, it is likely to be a lot safer than each of those things.
 
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keesje
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 11:29 pm

https://www.irishtimes.com/business/transport-and-tourism/iag-chief-says-frustration-with-airbus-a-factor-in-boeing-purchase-1.3955112

Listening to the IAG chief, to qualify this oder as a sign of confidence in the Boeing 737 MAX seems a bit far fetched.

Willie (a 737 pilot) is in a weak negotiations position with Airbus & hates it.
"Never mistake motion for action." Ernest Hemingway
 
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par13del
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Sun Jul 14, 2019 11:50 pm

keesje wrote:
Willie (a 737 pilot) is in a weak negotiations position with Airbus & hates it.

Why would he be in a weak position, I thought only Boeing did price gouging?
Airbus cockpit commonality concept is supposed to encourage airlines to use their a/c for all segments of their portfolio, are you hinting that Airbus has moved away from of their founding principles?
 
Vladex
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Mon Jul 15, 2019 12:06 am

Break the duopoly and you won't have these collusive fake orders and you won't have flying coffins like 737 MAX. As long as there is a duopoly and all kinds of collusion are allowed, there is no reason to make a good product and there is lots of reason to cut corners and subvert the industry.
 
Antarius
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Re: IAG 737 Max Order Is Prompted by More Than Just Price: CEO

Mon Jul 15, 2019 12:23 am

keesje wrote:
https://www.irishtimes.com/business/transport-and-tourism/iag-chief-says-frustration-with-airbus-a-factor-in-boeing-purchase-1.3955112

Listening to the IAG chief, to qualify this oder as a sign of confidence in the Boeing 737 MAX seems a bit far fetched.

Willie (a 737 pilot) is in a weak negotiations position with Airbus & hates it.


Looks like he just strengthened his negotiating position. Fanboys and people who only listen to their groupthink probably felt the same way - IAG is a captive customer and they can yank their chain around.

Sour grapes at its finest :roll:
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