IAG to buy 200 Boeing 737 MAX airplanes for $24 billion

International Airlines Group (IAG) has announced plans to purchase 200 Boeing 737 MAX jets in a deal valued at more than 24 billion dollars.

IAG is the parent company of Aer Lingus, British Airways, Iberia, Vueling, and Level. It is one of the world's largest airline groups with 582 aircraft flying to 268 destinations, carrying 113 million passengers in 2018.

Boeing 737 Max jets were grounded in mid-March after the fatal crashes in Ethiopia and Indonesia. Boeing has been working to fix the automatic safety feature which is the focus of crash investigations. There is no timeframe yet for the 737 Max's return to service.

IAG Chief Executive Officer Willie Walsh said the group will consider the 737 MAX as part of diversifying its future fleet to spur competition. The letter of intent to buy 200 planes was signed on Tuesday at the ongoing Paris Air Show here.

"We're very pleased to sign this letter of intent with Boeing and are certain that these aircraft will be a great addition to IAG's short-haul fleet," said Walsh. "We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months having received approval from the regulators."

In selecting the 737 MAX, IAG says it will fly a combination of the 737 MAX 8, which seats up to 178 passengers in a two-class configuration, and the larger 737 MAX 10 jet, which can accommodate as many as 230 passengers.

The airline did not mention a specific split between the two MAX models, though it anticipates deploying the aircraft at a number of the group's airlines including Vueling and Level.

Boeing Commercial Airplanes President and CEO Kevin McAllister said: "We are delighted that the IAG team recognised the superior qualities of the 737 MAX and has indicated an intention to return to the Boeing 737 family. We look forward to building on our long-standing partnership with IAG for many years to come."

The 737 MAX incorporates the latest technology CFM International LEAP-1B engines, advanced technology winglets, and other improvements. Boeing says the 737 MAX is 14 per cent more fuel-efficient than today's most efficient next-generation 737s, and 20 per cent better than the original next-generation 737s when they entered service.

While the IAG sale is not finalised, the announcement is significant because the 737 Max has been the focus of so many questions and uncertainty.