Don’t Believe the HUGE British Airways Boeing 737 MAX Order Announced Today

IAG, the parent of British Airways, Iberia, Aer Lingus, and Vueling, announced an order at the Paris Air Show for 200 Boeing 737 MAX aircraft. This is being trumpeted as a huge win for Boeing.

  • It signals confidence in the plane that’s been grounded for months

  • It puts Boeing ahead of Airbus in terms of total plane sales announced at the Paris Air Show

First, don’t believe the $24 billion price tag that’s being reported for this order. That just takes the ‘list price’ multiplied by the number of aircraft that have been ordered. But nobody pays list prices. Airlines usually pay about half of list price. $12 billion would still be a lot of money, however don’t believe that either.

  1. Boeing is desperate. They want to signal confidence and a win in the aircraft, and to get a major announce-able order while the plane is still grounded is huge for them. The discount they’d offer to do it would be bigger than usual.

  2. Willie Walsh, who used to run British Airways and now runs the IAG parent company, is a bottom-feeder. He sniffed around the Airbus A380 program before the end was announced for that aircraft, and was willing to take used aircraft, but no deal was forthcoming and we’re seeing A380s parked in the desert rather than meet Willie Walsh’s terms. He said they’re just too expensive to retrofit, so it wouldn’t have been enough to give him the planes for free.

  3. These aren’t real orders. There’s a “letter of intent” which doesn’t obligate IAG to much. There’s not even a firm outline of how many MAX 8s versus MAX 10s the order is supposed to be. There’s no announced plan for which airlines get how many of the aircraft (although low cost carrier LEVEL, and Aer Lingus, using these transatlantic makes some sense). The order could ultimately turn out to be real, because pricing is so good, but it could just as easily be a mirage.

  4. Despite finished aircraft backing up, and airlines potentially cancelling orders, this isn’t a deal for planes any time soon either. We shouldn’t expect to see the first delivery until 2023 — that’s if a firm deal comes out of this, and there’s no delay or deferral.

One Mile at a Time calls this profiting off of tragedy. I wouldn’t go that far. The 737 MAX fixes are potentially complete, and what’s left is convincing regulators that it’s safe to fly. It is highly likely that the aircraft will fly, and also that it will be safe — now that so many embarrassing stories have come out about key safety features turning out to be upsell items.

Wandering Aramean doesn’t think Boeing had “to pay IAG to take them off its hands.” And that technically might be true, this is a plane that will fly again and likely soon and has real operational value, to get BA to sign on to 200 planes and announce it at the Paris Air Show before regulators have agreed to Boeing’s plan for the aircraft, risking public backlash, would have certainly required doing a deal that would make Willie Walsh smile.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. From a frequent flyer perspective, I don’t know why I care about the BA order. I think it’s going for Boeing — and America — to get the MAX flying again. I’m almost 100% certain it will become a reliable and safe aircraft to fly. If this bit of PR helps that effort, it’s a good thing.

  2. I still have that nagging doubt that says the hardware of the plane is not safe to fly, so a decision was made to make it safe via software. The decision was made for speed and ease of adoption by other airlines.

    I can’t help but think that this was a mistake, and that the fundamentals should always have been that the hardware is always safe to fly. This seems like a huge strategical error done purely to fight off competition from Airbus, that should never have been allowed.

    Would love to hear what people who know what they are talking about have to say about this!

  3. Profiteering from disaster is what every corporation looks for, even a very great number of individuals. Buy low sell high! Someone must have suffered tragedy in order to sell low. And when it comes down to billions of dollars, really, the majority of people would set aside their moral standards to score a deal.

  4. Statements like “highly likely” and “almost 100% certain” that the MAX will be safe and reliable are a bit of a joke when it comes to commercial aircraft and demonstrate how damaged Boeing’s reputation and potentially future earnings are. Airlines have choices ( limited by the inability of other manufactures to make up for all MAX production) and to some extent so do passengers. To the extent there are choices, the MAX is at the top of the list of planes not to fly.

    There should be ZERO plane crashes due to improper aircraft design. You’d think one crash would be more than enough to open Boeing’s and the FAA’s eyes. But even after killing more than 150 additional people in the second crash, both Boeing and the FAA claimed the plane should keep flying. Any of us or our loved ones could have ended up in a MAX “smoking hole in the ground.” If Boeing suffers no real consequences for putting greed and arrogance above public safety, why should it or any other aircraft manufacturer care about getting the profit/safety equation right?

  5. Does not built my confidence in the MAX.

    For me it is not enough that i will be alive after a flight with almost 100 % certainty.

  6. British Airways has always been my favourite AIrline however I would not be prepared to fly on a Boeing 737 Max. The handling of the introduction of this plane has been a shocking disregard for public safetch.

  7. A less than ideal CG condition is what it is for the Max. Reduced inertial longitudinal stability that is compensated by software. It’s probably okay, but then the margin of safety is definitely reduced. Not all planes are created equal. I won’t panic if I had to fly one but I would probably book away.

  8. Boeing broke the social contract by placing a flawed aircraft in the air. There are 346 deaths attributed to that. It is going to take a lot more time to forget these deaths and forgive the airframe maker. I am also a frequent traveler and I have not interest in getting on a 737 MAX. Not because I think that it will be unsafe once it returns to the skies, but because Boeing lost my trust and does not deserve my patronage. That could have been one of my friends on that flight. Heck it could have been me. Boeing owns that and I will be voting with my wallet.

  9. Gary, you also know that almost all large orders for commercial aircraft are structured and announced in the same way.

  10. Boeing will certainly organize more cheerleading events like this one in the near future, it’s a question of survival. Getting rid of Max name should happen and Muilenberg will have to go. But BA will still be stuck with a terminal phase aircraft.

  11. No aircraft is perfect and man was not meant to fly. Any plane can go down under the right circumstances. Nevertheless:
    — Boeing’s responses to the crashes have been pathetic. Full cover-up mode.
    –It appears to me they are still covering up.
    –They need change all the top management.
    –Have new management do a complete safety review of Boeing’s design, manufacturing, training, and sales practices.
    –The new management should make significant proactive changes.

    Right now Boeing’s is one more Max crash away from completely having to scrap the plane. Moreover, suppose the Max is deemed safe and starts flying again. Given Boeing’s sloppiness, I would not want to fly on Boeing’s next generation plane for several years after it was released. Why? because I do not want to be the experimental mouse to see if the plane is safe.

  12. It is criminal what Boeing did. The design is unstable. It is an accepted engineering design aspect that any design must be stable if left on its own. IF a design is such that it fails to do its fundamental job then it should not be built. But of course Boeing decided that profits were more important than people so top management over ruled on basic “rules” to allow development and sales of a design that forces the plane to go to crash mode all the time. And the pathetic response was a flawed computer program that used input from a single source to override any pilots input and force the plane to not respond to the pilot. It is criminal. And Boeing continues to falsely claim this is a safe design. If the FAA was not complicit in this it would never fly. I for one will refuse to fly on this deathtrap. Boeing exec’s and the FAA who approved it should be jailed.

  13. I’m sorry but I can’t believe the”virtue signalling” going on here.

    So the order is not to be believed, even though 90pct of orders at Paris and Farnborough are LOIs rather than firm.

    Boeing is “sleazy” for selling aircraft after a tragedy?

    IAG is “bottom feeding” for ordering them?

    Get a grip, people. The PAR is designed to facilitate orders, many of which are not firm. IAG and Boeing struck a lucrative/necessary deal for both, the way business is normally conducted.

    All of this false moralising highlights how crazy and extreme these comment spaces have become.

    Personally I do hope all of the commenters here refuse to fly the 7M8, it will leave a hell of a lot of upgrade space for the rest of us.

  14. @Kerry. I am a conservative. I don’t virtue signal.

    If Boeing is beyond this, then perhaps Boeing’s closing stock price of $368.68/share (6/19/19) is a bargain. The 52 week high is $446.01/share. Put your money where your mouth is. Personally, I would not touch Boeing stock with a 20 foot poll.

  15. “If you don’t have time to do it right, when will you have time to do it over?” Coach John Wooden.

    In this case there was no time for a do over.

    Early flight testing proved the Max 8 was unstable. The airframe should have been redesigned. But in a rush to get it to market Boeing addressed the issue with software. And it failed.

    Without an airframe redesign, to my knowledge, the Max 8 will be the only airliner in the world that after being properly trimmed by its pilots will be incapable of stable flight without computer assistance.

    That scares me.

  16. “Without an airframe redesign, to my knowledge, the Max 8 will be the only airliner in the world that after being properly trimmed by its pilots will be incapable of stable flight without computer assistance.

    That scares me.”

    Exactly. This.

    Attempting to patch a hardware design problem with a software fix is never a great solution in product design. To go that route with an airplane — where the underlying hardware design is not capable of stable flight — means that any software failure creates a critically dangerous situation for everyone on board.

    The flawed plane design should not have been acceptable to Boeing. It should not have been acceptable to the FAA, and should not be now. It should not be acceptable to Congress.

    It is upsetting to see the REAL “market forces” — i.e., corporate money in politics — turning the conversation even at public hearings to certifying the “new software fix” instead of discussing the non-aeronautically-stable elephant in the room: The plane itself should be redesigned.

  17. This a well game plan to rescue unsafe 737MAX. Scrap and redesign it. It’s not right to put GE big Leap engine on the wings. Don’t try to use human for experiment.

  18. The primary aircraft design had bigger engines added later to the first conceived airframe design to compete quickly with the Airbus rival. Consequently, a very different aerodynamic profile to the original airframe design is apparent. A sophisticated software fix/patch-up to take control from the pilot and avoid the now real likelihood of a dangerous stall owing to the mis-match of airframe/engine is not good enough.

    No matter how the newly presented software fix is made by Boeing/FAA, the basic issue is the fundamental design flaw between airframe and engines.

    Many of the above comments are really sound: certainly BA must have a blinder of a deal to have bought it! But who will fly in it though?

    This is a flawed aircraft. The aerodynamic design problem has not gone away. Paying passengers deserve better; the manufacturer and regulator should be held to account..

  19. Well…. at this moment we find ourselves( the air traveller) in a bit of a pickle
    damn or blast to put it mildly.
    For me , I am a bad flyer anyway. by that i mean I grip the arm rests at take off. and i dont trust the thing in any part of its flight plan anyway. and by that I mean any manufacturer , airbus, boeing any of them.
    Airbus had a good rep. but a few of theirs went down by not inform pilots where switches are etc. (the auto pilot turn off switch ) caused one.
    Airbus has had there fair share as well.
    Look for me , i get scared when i see so much plastic above and so much foam in the seats. so much wifi or connectivity. BS . or so much carpet below me or this LED lighting BS . the extra wiring required. the excess’s of first class. so some idiot can sleep. that is absurd. the whole thing reeks of some narcissistic fantasy .

    Its a bloody machine to get you from one point to another safely . I am not interested in simulated sky lighting or dusk or whatever. bs wifi or any other sh1t or water from mountain springs or wine or booze that is a complete load of RUBBISH.
    iF your the sort of idiot that wants that go to restaurant before you board .Or find another plastic nightmare to fly in.Hell load the thing up with champagne do what you want . But dont come near me.

    I am in economy . My purpose is arrive at the destination for work. physical work Trade work. Mechanical work . Knowing the machine i fly in WILL get me there. Knowing that to the best of the manufactures ability they have included multiple redundancy flight control systems . that their pilots are superbly trained. over and above any comfy chair plastic boozed french Michelin stared
    theatre /restaurant in sky B Sh1t!!!

    There is an un-fortuitousness that I have to occupy a craft that caters to the sick narcissistic idiot up front drinking some over priced booze.

    Oh…. and by the way bring back the control column get rid of the joy stick.
    And for the front of the plane people glance out the window … that is air you are going thru. weather is part of it . that can be /is seriously dangerous stuff, all the extra weight carried for your comfort rubbish is seriously detrimental to me getting to where i want to go.

  20. Boeing has the money and lobbyists to get the FAA to approve 737 Max to fly again. There is too much money riding on this. Boeing will say whatever it has to say, including an apology, to make that happen. Therefore, the 737 Max will fly again. No question if. It’s a question of when. Boeing will find a way to make the test flights not crash.

    But just because the 737 Max doesn’t crash during testing doesn’t mean it’s safe. Have you seen what pilots are supposed to do if MCAS fails? They have to manually crank a dinner sized plate. Depending on how fast the plane is going, two people might be required to crank it. This is all supposed to happen in a matter of seconds. Can you honestly tell me every pilot will have the physical strength to do this in the time required?

    My question is this: why is MCAS even needed? Why can’t we have an alarm that goes off that tells the pilot to manually adjust the airplane if it is going to stall? What’s wrong with giving the pilot the training he needs to fly the airplane safely other than Boeing’s corporate greed for more money and profits? The reason MCAS is needed is that the plane can go into a stall mode more quickly than a pilot can react in time to fly the plane safely. Otherwise, Boeing could have just abandoned it. Boeing is wedded to this software fix. But as anybody knows, the software is going to need updating. What Boeing is trying to do is salvage its profits and order book. Disgusting.

  21. I agree with you, andrea. As I understand from the articles I read about it, that crank may be something one pilot can turn easily, or it may required a great deal of upper body strength, or it may require 2 pilots, and even then, under some circumstances, it may be very difficult to turn.

    Does this mean women pilots need not apply? (I realize this is not the most pressing of issues where MAX certification/safety is concerned, but it should certainly be somewhere on the list of things to consider.)

  22. @Bigsix

    Yes, Airbus are all designed to be fly-by-wire and have multiple computers doing multiple redundancies, not 1 computer with no redundancy on an older flight control system. The B737 still uses trim wheels from its original B737-100 model days. To have a company NOT have multiple redundancy for a computer that has flight surface control capability, is ludicrous. 1 AoA sensor input…smh.

  23. I used to love boeing…..not any more. It’s how they handled everything…..they actually were prepared to continue flying these planes….. after two accidents! Unbelievable. The ceo should go to jail and also all other management. THEY DIDN”T CARE!!! That’s what appalling.

  24. No-one seems to understand the real issue here. The problem is NOT just that the plane is defective.The real issue here is that the testing strategy used to prove that the plane is safe completely failed.
    All operators should have independent testing to try and deliberately crash a plane (under simulation conditions of course). If that was done properly and that failed to find the problem then the first issue is to find the testing faults, correct them and ONLY THEN fix the plane, not the other way round.

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