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Opus99
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IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:22 pm

https://www.reuters.com/business/aerosp ... 021-12-16/

Key Quote from this article:

“Boeing is expected to grab at least one more order before end-year and appears ahead so far in a narrowbody contest run by British Airways owner IAG (ICAG.L), industry sources said.”

So let’s discuss. IAG MAX or NEO? What day you?

NEO the business case is obvious

MAX, why would IAG potentially deflect? And which airlines in the group could we see these aircraft placed
 
x1234
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:31 pm

They should go for the Airbus as the A321XLR has massive range with network expasion to Eastern Europe Central Asia, Africa and North America (thin and light routes).
 
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Polot
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:37 pm

x1234 wrote:
They should go for the Airbus as the A321XLR has massive range with network expasion to Eastern Europe Central Asia, Africa and North America (thin and light routes).

IAG already has XLRs on order. This order would be for European fleet where the range isn’t necessary.

For BA specifically, they don’t have enough LHR slots for a large thin and light long haul expansion (and a lot of those thin routes require the strength of the LHR hub to work), and other airlines have a better cost structure for operating the routes out of other British Isle airports (one of the reasons we are seeing Aer Lingus, not BA, launching long haul from MAN).
Last edited by Polot on Thu Dec 16, 2021 4:38 pm, edited 1 time in total.
 
Breathe
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:38 pm

Very interesting. Perhaps Boeing are offering IAG a deal they can't refuse or IAG is playing smoke and mirrors to get a better deal from Airbus.

It wouldn't be out of the question for it happen, the 777X order came pretty much out of the blue.
 
lostsound
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:39 pm

Is this order for the Gatwick ops or their narrow body fleet in general? As they already have NEOs in their fleet and on order.
 
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Polot
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:41 pm

lostsound wrote:
Is this order for the Gatwick ops or their narrow body fleet in general? As they already have NEOs in their fleet and on order.

I’m assuming it would be the same purpose as the never firmed IAG Max LOI- BA LGW (now EuroFlyer), Level (do they still have narrowbodies after Covid?), and Vueling.
 
BrianDromey
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:44 pm

Breathe wrote:
Very interesting. Perhaps Boeing are offering IAG a deal they can't refuse or IAG is playing smoke and mirrors to get a better deal from Airbus.

It wouldn't be out of the question for it happen, the 777X order came pretty much out of the blue.


With the QF order and the heavily rumoured KL order for the A220/321 its pretty hard to put a coherent argument why an all A320 operator would go to the 737. The direction of travel in the wider market just does not support it. So let's look at the IAG specific case, they already have orders for the A321XLR for use at the extremes of their network. They already LOI'd for the MAX, so see some use across the group. They have delayed deliveries across 787 and 777X programmes, I imagine they could make those credits work doubly hard against MAX's. The volume of any MAX order will be interesting. Will it be closer to 50, for the new LeG Euroflyer operation or the 200 they initially ordered to cover LGW and some Vueling operations?
 
Breathe
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:49 pm

BrianDromey wrote:
Breathe wrote:
Very interesting. Perhaps Boeing are offering IAG a deal they can't refuse or IAG is playing smoke and mirrors to get a better deal from Airbus.

It wouldn't be out of the question for it happen, the 777X order came pretty much out of the blue.


With the QF order and the heavily rumoured KL order for the A220/321 its pretty hard to put a coherent argument why an all A320 operator would go to the 737. The direction of travel in the wider market just does not support it. So let's look at the IAG specific case, they already have orders for the A321XLR for use at the extremes of their network. They already LOI'd for the MAX, so see some use across the group. They have delayed deliveries across 787 and 777X programmes, I imagine they could make those credits work doubly hard against MAX's. The volume of any MAX order will be interesting. Will it be closer to 50, for the new LeG Euroflyer operation or the 200 they initially ordered to cover LGW and some Vueling operations?

Indeed. Many moving parts to any deal if it happens. IAG will definitely be playing hardball with both Airbus and Boeing that's for sure.

As a side note, we've generally not expected many orders this year, then all of a sudden we potentially have 3 major airline holding company orders being announced within days/a week of each other if the AF-KLM order gets announced.
 
astuteman
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:51 pm

Opus99 wrote:
https://www.reuters.com/business/aerospace-defense/airbus-wins-dominant-share-air-france-klm-jet-purchase-sources-2021-12-16/

Key Quote from this article:

“Boeing is expected to grab at least one more order before end-year and appears ahead so far in a narrowbody contest run by British Airways owner IAG (ICAG.L), industry sources said.”

So let’s discuss. IAG MAX or NEO? What day you?

NEO the business case is obvious

MAX, why would IAG potentially deflect? And which airlines in the group could we see these aircraft placed


I confess to being puzzled.
We had the famous IAG LOI for 200 MAX, what? 2 1/2 years ago (June 2019)?
Then the moan from Airbus that they weren't asked to bid.

So my question is "What tender?"
Was the ever an ITT with both manufacturers invited to bid?
This is the first I've heard since then.
Apologies if I missed it.

Rgds
 
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MrHMSH
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 4:55 pm

Does seem strange that an airline group with no 737s of any description and A32Xs (including neos) on property at every mainline carrier within IAG would be leaning towards Boeing as much as implied in the OP, but maybe IAG is frustrated with past deals and wants a better one. If IAG hadn't already committed to neos then there'd at least be some rationale for wanting a long term switch, but they've already got 100s on order. Or maybe they just want a mixed fleet to keep both honest, seen the US3 do this and IAG is big enough to accommodate both.

I don't see the need for MAXs at BA (LHR), IB or EI, but BA's LGW operation might be a good target here, and VY.
 
RoyalBrunei757
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 5:36 pm

This thread needs a 737MAX photo in BA colour:

British Airways (Comair Limited) Boeing 737-8 MAX ZS-ZCA
 
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FiscAutTecGarte
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 5:59 pm

WW LOI has no bearing here... It's expired (long expired)... He's gone (long gone)...

Boeing is a challenger going up against the encumbant. This one is Airbus's to loose.... They've been winning alot lately.
 
Opus99
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 5:59 pm

FiscAutTecGarte wrote:
WW LOI has no bearing here... It's expired (long expired)... He's gone (long gone)...

Boeing is a challenger going up against the encumbant. This one is Airbus's to loose.... They've been winning alot lately.

Steve Gunning says LOI is still in play as at Q3 call
 
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JerseyFlyer
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 6:17 pm

The 2019 MAX LoI was struck without a competition, said to be to avoid a single narrow body supplier across IAG.

So I am surprised that a competition is needed now. What changed?
 
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enzo011
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 6:23 pm

JerseyFlyer wrote:
The 2019 MAX LoI was struck without a competition, said to be to avoid a single narrow body supplier across IAG.

So I am surprised that a competition is needed now. What changed?


Almost like those posters who pointed out the LOI made no sense and should not be regarded as concrete at the time was right. All posters said that it would not make sense to sign an order without a tender and this has now happened.
 
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MrHMSH
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 6:35 pm

FiscAutTecGarte wrote:
WW LOI has no bearing here... It's expired (long expired)... He's gone (long gone)...

Boeing is a challenger going up against the encumbant. This one is Airbus's to loose.... They've been winning alot lately.


Only speculation, but I feel it may have a bearing in terms of being the starting price. It'd be a new contract, but with some agreements having been made then they could be carried over.
 
by738
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 6:38 pm

RoyalBrunei757 wrote:
This thread needs a 737MAX photo in BA colour:

British Airways (Comair Limited) Boeing 737-8 MAX ZS-ZCA

But with the correct tail logo paint job … :roll:
 
FluidFlow
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 6:47 pm

8200 for Vueling? Would make sense and then transfer the CEOs and NEOs to BA, IB and EI. Mabe BA at Gatwick but thats 20-30, thats a very small subfleet. IE will definetely not get MAX, they are perfectly located for LR/XLR to Borth America and to small for a mixed fleet. LHR is locked with containeraised luggage so definetely 320 territory. That leaves IB, Gatwick and Vueling. As said Gatwick ops is too small for a big order. So the MAX will mainly go to Spain.
I guess it has to be Vueling and their NEOs go to IB.
 
Opus99
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 6:51 pm

If Boeing get MAX into IAG

It will be for Gatwick - Euroflyer. It will be a separate fleet like city flyer. BA have said that it will be separate. Gatwick can get about 40 frames potentially more if BA wants to use this as their U.K. low cost arm to really drive comp with easyJet etc.

Veiling expansion.

I know IAG is focused on driving gatwick cost down. If MAX will bring that cost even lower than the NEOs from the jump. IAG could very well take the MAX. As crazy as it may sound
 
ben7x
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 6:58 pm

After todays happenings I strongly believe this will be another win for Airbus… If Boeing cannot convince two hardcore 737 operators (which I both expected to order the MAX), they most probably cannot convince IAG neither.

(Stupid question from someone who’s main language is not English: do I say „… they most probably cannot convince IAG neither.“ or „…either.“?)
 
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MrHMSH
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:04 pm

ben7x wrote:
After todays happenings I strongly believe this will be another win for Airbus… If Boeing cannot convince two hardcore 737 operators (which I both expected to order the MAX), they most probably cannot convince IAG neither.

(Stupid question from someone who’s main language is not English: do I say „… they most probably cannot convince IAG neither.“ or „…either.“?)


'Cannot convince IAG either'.
 
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FiscAutTecGarte
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:05 pm

Opus99 wrote:
FiscAutTecGarte wrote:
WW LOI has no bearing here... It's expired (long expired)... He's gone (long gone)...

Boeing is a challenger going up against the encumbant. This one is Airbus's to loose.... They've been winning alot lately.

Steve Gunning says LOI is still in play as at Q3 call


From the standpoint... "This is how cheap you were willing to go 2 1/2 years ago on X mix of planes."

ben7x wrote:
After todays happenings I strongly believe this will be another win for Airbus… If Boeing cannot convince two hardcore 737 operators (which I both expected to order the MAX), they most probably cannot convince IAG neither.

(Stupid question from someone who’s main language is not English: do I say „… they most probably cannot convince IAG neither.“ or „…either.“?)


neither is often used when both options are not acceptable. Either tends to be used in a positive way, when one option will be chosen
 
StTim
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:05 pm

ben7x wrote:
After todays happenings I strongly believe this will be another win for Airbus… If Boeing cannot convince two hardcore 737 operators (which I both expected to order the MAX), they most probably cannot convince IAG neither.

(Stupid question from someone who’s main language is not English: do I say „… they most probably cannot convince IAG neither.“ or „…either.“?)


English speaker but an engineer so not particularly good with it - but I would say that the neither/either is actually superfluous.
 
Opus99
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:07 pm

FiscAutTecGarte wrote:
Opus99 wrote:
FiscAutTecGarte wrote:
WW LOI has no bearing here... It's expired (long expired)... He's gone (long gone)...

Boeing is a challenger going up against the encumbant. This one is Airbus's to loose.... They've been winning alot lately.

Steve Gunning says LOI is still in play as at Q3 call


From the standpoint... "This is how cheap you were willing to go 2 1/2 years ago on X mix of planes."

ben7x wrote:
After todays happenings I strongly believe this will be another win for Airbus… If Boeing cannot convince two hardcore 737 operators (which I both expected to order the MAX), they most probably cannot convince IAG neither.

(Stupid question from someone who’s main language is not English: do I say „… they most probably cannot convince IAG neither.“ or „…either.“?)


neither is often used when both options are not acceptable. Either tends to be used in a positive way, when one option will be chosen

Let’s watch. As always all will be revealed
 
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DarkSnowyNight
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:13 pm

Revelation wrote:
DarkSnowyNight wrote:
If the order goes the way RoyalBrunei757 says, I can see that making sense so long as we are talking about intra-euro routes. The MAX8 can be somewhat competitive on ~1000nm routes if we line up enough swiss cheese, so I can see that being a good toleration for the price. I am not saying it is impossible, but I struggle with how that could jump to straight-up want. Especially with so much A32X infrastructure throughout IAG's systems...

Meanwhile, Air Canada operates MAX8 TATL to LHR...


Probably from Halifax. :)

In any case, I have flown in a MAX TATL before. I know they can actually do it. Just not with the same efficiency a NEO can.

Anyway, interesting you bring that up. AC is literally the only airline I can think of that went from A32X to MAX in a serious number. Certainly the only blue chipper to do that. That also tells me a lot.
 
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Polot
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:17 pm

DarkSnowyNight wrote:
Anyway, interesting you bring that up. AC is literally the only airline I can think of that went from A32X to MAX in a serious number. Certainly the only blue chipper to do that. That also tells me a lot.

SQ (Silk Air) did as well.


The Neo is a fantastic plane, but “Airlines X and Y just switched to Airbus so airline Z would never switch to Boeing” is terrible logic/justification that will come back to bite you in the behind in the long run.
 
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Revelation
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:23 pm

FiscAutTecGarte wrote:
ben7x wrote:
After todays happenings I strongly believe this will be another win for Airbus… If Boeing cannot convince two hardcore 737 operators (which I both expected to order the MAX), they most probably cannot convince IAG neither.

(Stupid question from someone who’s main language is not English: do I say „… they most probably cannot convince IAG neither.“ or „…either.“?)

neither is often used when both options are not acceptable. Either tends to be used in a positive way, when one option will be chosen

Indeed, it may be helpful to think of "neither" as "not either".
 
SEU
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:26 pm

I hope Boeing gets this order because they have taken a battering from Airbus recently, but why would IAG get the MAX, it doesn't fit anywhere in their airlines.
 
FluidFlow
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:26 pm

Opus99 wrote:
If Boeing get MAX into IAG

It will be for Gatwick - Euroflyer. It will be a separate fleet like city flyer. BA have said that it will be separate. Gatwick can get about 40 frames potentially more if BA wants to use this as their U.K. low cost arm to really drive comp with easyJet etc.

Veiling expansion.

I know IAG is focused on driving gatwick cost down. If MAX will bring that cost even lower than the NEOs from the jump. IAG could very well take the MAX. As crazy as it may sound


The problem with a different Fleet at Gatwick is, that during winter they can not use the excess frames efficiently for other operations within BA. If Gatwick and LHR have the same aircraft they can switch them depending on demand.
 
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Polot
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:30 pm

FluidFlow wrote:
Opus99 wrote:
If Boeing get MAX into IAG

It will be for Gatwick - Euroflyer. It will be a separate fleet like city flyer. BA have said that it will be separate. Gatwick can get about 40 frames potentially more if BA wants to use this as their U.K. low cost arm to really drive comp with easyJet etc.

Veiling expansion.

I know IAG is focused on driving gatwick cost down. If MAX will bring that cost even lower than the NEOs from the jump. IAG could very well take the MAX. As crazy as it may sound


The problem with a different Fleet at Gatwick is, that during winter they can not use the excess frames efficiently for other operations within BA. If Gatwick and LHR have the same aircraft they can switch them depending on demand.

Did BA even do that often in the first place? With Gatwick going to a new subsidiary (Euroflyer) it’s going to be less common in the future regardless of what aircraft they select. Euroflyer employees will be separate than BA employees (ie not BA employees working with a different contract) which makes removing and adding planes more disruptive.
 
Opus99
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:32 pm

FluidFlow wrote:
Opus99 wrote:
If Boeing get MAX into IAG

It will be for Gatwick - Euroflyer. It will be a separate fleet like city flyer. BA have said that it will be separate. Gatwick can get about 40 frames potentially more if BA wants to use this as their U.K. low cost arm to really drive comp with easyJet etc.

Veiling expansion.

I know IAG is focused on driving gatwick cost down. If MAX will bring that cost even lower than the NEOs from the jump. IAG could very well take the MAX. As crazy as it may sound


The problem with a different Fleet at Gatwick is, that during winter they can not use the excess frames efficiently for other operations within BA. If Gatwick and LHR have the same aircraft they can switch them depending on demand.

Hmmm that’s a good point. Let’s see anyway. This is first time Reuters has said Boeing has the lead in any of these Christmas showdowns (I just came up with that). Airbus’ to lose though that’s for sure
 
SEU
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:33 pm

Question to people who know better that I do. In this case, IAG surely has more bargaining power than BA do? IAG knows Boeing needs the orders, they can ask close to "dumping" price
 
Opus99
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:35 pm

SEU wrote:
Question to people who know better that I do. In this case, IAG surely has more bargaining power than BA do? IAG knows Boeing needs the orders, they can ask close to "dumping" price

After the week Boeing has had. IF I was Boeing, I will jump higher than IAG asks me to jump
 
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Polot
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:41 pm

SEU wrote:
Question to people who know better that I do. In this case, IAG surely has more bargaining power than BA do? IAG knows Boeing needs the orders, they can ask close to "dumping" price

I’m not sure the individual airlines owned by IAG even negotiate orders themselves anymore, I think it’s all done via IAG.

In any event no where does it state this competition is for BA only (BA is just mentioned because it has far better international name recognition than IAG or some of the other group airlines like Vueling).
 
ABMUC
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:45 pm

I doubt that any iag airline will replace their Neos with 737.
 
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DarkSnowyNight
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:47 pm

Polot wrote:
DarkSnowyNight wrote:
Anyway, interesting you bring that up. AC is literally the only airline I can think of that went from A32X to MAX in a serious number. Certainly the only blue chipper to do that. That also tells me a lot.

SQ (Silk Air) did as well.


The Neo is a fantastic plane, but “Airlines X and Y just switched to Airbus so airline Z would never switch to Boeing” is terrible logic/justification that will come back to bite you in the behind in the long run.



Looks like those were mainly to replace existing 738s & 733s more than anything else...

Anyway, it is not so much a logic jump as an observation to what has actually happened so far. . .
 
Aceme
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 7:48 pm

If the 737Max go to BA's new Low Cost airline, the choice in EasyJet A320 vs BA's 737MAX, Id rather go for Easy...
 
airbazar
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 8:07 pm

This should be Airbus' order to lose I think. Every IAG airline is an all Airbus fleet for NB aircraft. I don't see the point of switching to the 737. It seems to me like they are keeping Boeing in here only to try to drive a bargain from Airbus.
 
DCA350
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 8:10 pm

There is no logical reason for a MAX order other than price.. IAG already has NEOs, and airlines keep saying its cheaper to streamline pilot opps. Does IAG use containers? If not I imagine that keeps the MAX somewhat competitive
 
VS11
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 8:27 pm

I am not sure how I feel about this order. It appears Boeing has raised the MAX prices while Airbus has not for the A32X and this alone is a huge reason for Boeing to see Ryanair walk away, Qantas and AF/KLM to go Airbus.

Boeing's game plan seems to be that at some point Airbus will need to raise its prices and/or will have production slots far into the future, at which point Boeing will become the only available game in town.

IAG's best long-term strategy is to not get locked in entirely with Airbus so a 737 MAX order makes sense but hopefully the price does not derail this opportunity.
 
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DarkSnowyNight
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 8:42 pm

VS11 wrote:
I am not sure how I feel about this order. It appears Boeing has raised the MAX prices while Airbus has not for the A32X and this alone is a huge reason for Boeing to see Ryanair walk away, Qantas and AF/KLM to go Airbus.


The FR thing is particularly bad, as they did not bother to deal with Airbus after. This sends an unmistakable signal that MAXs are not worth anything unless discounted below cost.

Doubly so for today's announcements. While I am sure QF & AF/KL group will not pay list, AB's backlog is far too congested for it to be worth it to offer those at a price similar to what BCA can do for the MAX. Yet they still went with NEOs & 220s between all those companies anyway.

BCA are in a very unenviable position. They cannot afford to build planes below cost. But if they even think about asking for NEO prices, they are out of the game tomorrow.

I do not think it is the end of the world for them though. It is just time to quit screwing around and come up with a competitive NB aircraft.
 
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Polot
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 8:45 pm

DarkSnowyNight wrote:
VS11 wrote:
I am not sure how I feel about this order. It appears Boeing has raised the MAX prices while Airbus has not for the A32X and this alone is a huge reason for Boeing to see Ryanair walk away, Qantas and AF/KLM to go Airbus.


The FR thing is particularly bad, as they did not bother to deal with Airbus after. This sends an unmistakable signal that MAXs are not worth anything unless discounted below cost.

How do you draw that conclusion? Not going to Airbus right after just means FR only wants to order planes right now from anyone only if they are dirt cheap. Not dealing with Airbus right after is actually a positive thing for Boeing/Max. It means that FR still prefers operating only 737s versus going and trying to repair their relationship with Airbus.
 
sxf24
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 8:52 pm

DarkSnowyNight wrote:
VS11 wrote:
I am not sure how I feel about this order. It appears Boeing has raised the MAX prices while Airbus has not for the A32X and this alone is a huge reason for Boeing to see Ryanair walk away, Qantas and AF/KLM to go Airbus.


The FR thing is particularly bad, as they did not bother to deal with Airbus after. This sends an unmistakable signal that MAXs are not worth anything unless discounted below cost.

Doubly so for today's announcements. While I am sure QF & AF/KL group will not pay list, AB's backlog is far too congested for it to be worth it to offer those at a price similar to what BCA can do for the MAX. Yet they still went with NEOs & 220s between all those companies anyway.

BCA are in a very unenviable position. They cannot afford to build planes below cost. But if they even think about asking for NEO prices, they are out of the game tomorrow.

I do not think it is the end of the world for them though. It is just time to quit screwing around and come up with a competitive NB aircraft.


No one pays list price. I’m not even sure why there are list prices for airplanes.

The market value of the airplanes is not that different. Appraisers, which get pretty good pricing intel from various sources, have the spread between the MAX 8 and A321neo at about ~$2M.

Airbus is very focused on market share and is making room in their skyline for new customers (much to the frustration of some existing customers). I’m sure the pricing for both QF and AF/KL was attractive: neither airline is stupid and needs to offset the cost of switching.
 
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DarkSnowyNight
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 9:13 pm

Polot wrote:
How do you draw that conclusion? Not going to Airbus right after just means FR only wants to order planes right now from anyone only if they are dirt cheap. Not dealing with Airbus right after is actually a positive thing for Boeing/Max. It means that FR still prefers operating only 737s versus going and trying to repair their relationship with Airbus.


Because it means the MAX10 —any MAX's really— are only worth having if the acquisition cost is low enough to offset its innate disadvantages. This is obviously not applicable to AB as FR saw no mileage in trying to low ball a fleet they do not need just yet. If the need were urgent, they would have either dealt with Airbus or played along BCA's pricing fantasies. Neither happened, which means the MAX is only worth having as an opportunistic purchase.

sxf24 wrote:
No one pays list price. I’m not even sure why there are list prices for airplanes.


Very true, and as I have already said, I am sure that QF & AF/KL did not pay a list price.

As for the why, list does traditionally outline what a carrier can expect to pay for a green frame, powerplant, BFE, and initial MX program, as all of those are sold separately. I would agree though, that it is still something of an anachronism, and trying to compare that to final is as irksome as figuring sales tax —VAT— here in the states. There are few enough OEMs that the price should just be the price. C'est...

sxf24 wrote:
Airbus is very focused on market share and is making room in their skyline for new customers (much to the frustration of some existing customers).


Not to anything like this extent, they are not, no. If that were the case, they would have made WN happen. Keep in mind, there really are not a lot of majors left that are not already AB customers.

sxf24 wrote:
I’m sure the pricing for both QF and AF/KL was attractive: neither airline is stupid and needs to offset the cost of switching.


Which is accomplished by having an aircraft that delivers better metrics than its competition can reasonably hope to. This is why we do not see any relevant numbers of 32Xs being traded for MAXs, but we do see plenty of traffic headed the other way. Their values are not similar or comparable.

The next year will be interesting, but expect to see a lot more of this.
 
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Revelation
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 9:17 pm

VS11 wrote:
I am not sure how I feel about this order. It appears Boeing has raised the MAX prices while Airbus has not for the A32X and this alone is a huge reason for Boeing to see Ryanair walk away, Qantas and AF/KLM to go Airbus.

DarkSnowyNight wrote:
The FR thing is particularly bad, as they did not bother to deal with Airbus after. This sends an unmistakable signal that MAXs are not worth anything unless discounted below cost.

Interesting that we now feel a recipe for success is for vendors to meet MOL's demands on price, and find it significant when they decide not to.
 
Opus99
Topic Author
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 9:19 pm

DarkSnowyNight wrote:
Polot wrote:
How do you draw that conclusion? Not going to Airbus right after just means FR only wants to order planes right now from anyone only if they are dirt cheap. Not dealing with Airbus right after is actually a positive thing for Boeing/Max. It means that FR still prefers operating only 737s versus going and trying to repair their relationship with Airbus.


Because it means the MAX10 —any MAX's really— are only worth having if the acquisition cost is low enough to offset its innate disadvantages. This is obviously not applicable to AB as FR saw no mileage in trying to low ball a fleet they do not need just yet. If the need were urgent, they would have either dealt with Airbus or played along BCA's pricing fantasies. Neither happened, which means the MAX is only worth having as an opportunistic purchase.

sxf24 wrote:
No one pays list price. I’m not even sure why there are list prices for airplanes.


Very true, and as I have already said, I am sure that QF & AF/KL did not pay a list price.

As for the why, list does traditionally outline what a carrier can expect to pay for a green frame, powerplant, BFE, and initial MX program, as all of those are sold separately. I would agree though, that it is still something of an anachronism, and trying to compare that to final is as irksome as figuring sales tax —VAT— here in the states. There are few enough OEMs that the price should just be the price. C'est...

sxf24 wrote:
Airbus is very focused on market share and is making room in their skyline for new customers (much to the frustration of some existing customers).


Not to anything like this extent, they are not, no. If that were the case, they would have made WN happen. Keep in mind, there really are not a lot of majors left that are not already AB customers.

sxf24 wrote:
I’m sure the pricing for both QF and AF/KL was attractive: neither airline is stupid and needs to offset the cost of switching.


Which is accomplished by having an aircraft that delivers better metrics than its competition can reasonably hope to. This is why we do not see any relevant numbers of 32Xs being traded for MAXs, but we do see plenty of traffic headed the other way. Their values are not similar or comparable.

The next year will be interesting, but expect to see a lot more of this.

I don’t think it’s a MAX problem. It’s a Boeing problem. Before MAX crisis. It was Boeings fastest selling jet ever in its 100 year history. You don’t get that from having a disadvantaged product. It had 5200 orders and was heading full speed ahead for 6000 and that’s the truth. The issue is Boeing not MAX. Boeing as an entity is unreliable and has shown itself so bare. It’s hard to ignore it.
 
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Polot
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 9:36 pm

DarkSnowyNight wrote:
Polot wrote:
How do you draw that conclusion? Not going to Airbus right after just means FR only wants to order planes right now from anyone only if they are dirt cheap. Not dealing with Airbus right after is actually a positive thing for Boeing/Max. It means that FR still prefers operating only 737s versus going and trying to repair their relationship with Airbus.


Because it means the MAX10 —any MAX's really— are only worth having if the acquisition cost is low enough to offset its innate disadvantages. This is obviously not applicable to AB as FR saw no mileage in trying to low ball a fleet they do not need just yet. If the need were urgent, they would have either dealt with Airbus or played along BCA's pricing fantasies. Neither happened, which means the MAX is only worth having as an opportunistic purchase.

Not it doesn’t. All it means is that at the current time buying any plane is only worth it (to Ryanair) if it is at an opportunistic purchase. Because as you say they don’t need any plane urgently. And Boeing decided not to drop Max prices to levels low enough to satisfy MOL.

Boeing has sold 737s since then (including 109 last month). I’m not sure why we are suddenly deciding Ryanair is the arbitrator that decides a plane’s worth in the market place and eyes of other airlines.
 
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DarkSnowyNight
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 9:49 pm

Opus99 wrote:
I don’t think it’s a MAX problem. It’s a Boeing problem. Before MAX crisis. It was Boeings fastest selling jet ever in its 100 year history. You don’t get that from having a disadvantaged product. It had 5200 orders and was heading full speed ahead for 6000 and that’s the truth. The issue is Boeing not MAX. Boeing as an entity is unreliable and has shown itself so bare. It’s hard to ignore it.


It is certainly a BCA problem. But it is still a stretch to say that the MAX was some great seller, when most of those were legacy NG/Classic replacements.

Fast FWD to now, we are left with an aircraft outclassed on the top end by the 321 and on the below end by the 220. It is fair to say that the MAX was safer at the below end at its inception as the 220 was still a BBD project. However, things are not likely to improve. It has been mentioned before, but a lot of the key program differences also involve AB having a lot more room to continue development of their NB lines whereas the MAX is, well... MAX'd out.

For all that, yes, I would actually say that is more of a BCA issue than a specific MAX issue. It is ultimately BCA who has refused to bring a new product to market after all...



Revelation wrote:
VS11 wrote:
I am not sure how I feel about this order. It appears Boeing has raised the MAX prices while Airbus has not for the A32X and this alone is a huge reason for Boeing to see Ryanair walk away, Qantas and AF/KLM to go Airbus.

DarkSnowyNight wrote:
The FR thing is particularly bad, as they did not bother to deal with Airbus after. This sends an unmistakable signal that MAXs are not worth anything unless discounted below cost.

Interesting that we now feel a recipe for success is for vendors to meet MOL's demands on price, and find it significant when they decide not to.


Let us be clear, that is definitely not a recipe for success. It is simply a measure of how bad things there are now.

Polot wrote:
Because as you say they don’t need any plane urgently.


And when they do, they will either pay what AB costs or BCA will come in with a much lower bid. That was the point, and there is nothing to suggest anything apart from that is the case.


Polot wrote:
I’m not sure why we are suddenly deciding Ryanair is the arbitrator that decides a plane’s worth in the market place and eyes of other airlines.


No one said that, and I think you know that. What was said was that BCA does not have any real pricing power in that segment altogether. FR are just along for the ride on that one...
 
Baruch
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Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 9:59 pm

sxf24 wrote:
The market value of the airplanes is not that different. Appraisers, which get pretty good pricing intel from various sources, have the spread between the MAX 8 and A321neo at about ~$2M.


Are you referring to the A320neo? The spread between the MAX 8 and the A321neo should be higher, high single digits at the very least.
Last edited by Baruch on Thu Dec 16, 2021 9:59 pm, edited 1 time in total.
 
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Polot
Posts: 13102
Joined: Thu Jul 28, 2011 3:01 pm

Re: IAG narrowbody Tender 737MAX/A320NEO

Thu Dec 16, 2021 9:59 pm

DarkSnowyNight wrote:
And when they do, they will either pay what AB costs or BCA will come in with a much lower bid. That was the point, and there is nothing to suggest anything apart from that is the case.

You literally have no clue what Ryanair will pay when they actually need planes. Nobody here does. For all we know they will be willing to pay slightly more for the 737-10 than what Airbus offers for A321 if the complete package (training, induction, etc) works out in Boeing’s favor. They may be completely willing to pay more for Max 8 200s than A320neos. You are creating opinions and presenting them as facts by warping events to fit your preconceived notions.

We have no clue what price they were trying to get from Boeing, how that price compares to other recent deals Boeing has made, and how that price compares to what Ryanair is willing to pay when it comes a time that they actually need the planes ASAP and not 5 years in the future.

You are also ignoring things like capability and automatically assuming getting a lower price for a plane is bad. If the 737-10 is not being offered at lower prices than the A321LR or XLR for example than I would shift my concern over to Airbus and not Boeing.
Last edited by Polot on Thu Dec 16, 2021 10:09 pm, edited 1 time in total.

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