Boeing finds the first buyer for a 737 Max since its grounding

By Chris Isidore, CNN Business

New York (CNN Business)Boeing got a huge vote of confidence for its troubled 737 Max on Tuesday as International Airlines Group announced it plans to buy 200 of the jets.

Boeing (BA) and IAG, the owner of Aer Lingus, British Airways, Iberia and other European carriers, announced a letter of intent on the purchase of the jets at the Paris Air Show.
Although IAG does use wide-body jets from Boeing, the purchase is a major shift for IAG, which now almost exclusively uses the A320 family aircraft from rival Airbus (EADSF) for its single-aisle jets.

Boeing 737 Max jets were grounded in mid-March in the wake of fatal crashes in Ethiopia and Indonesia. Boeing has been working to come up with a fix to the automatic safety feature that is the focus of crash investigations. There is not yet a time frame for the 737 Max’s return to service.
“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,” said Willie Walsh, CEO of IAG.

The 737 Max is Boeing’s bestselling jet, and it has a backlog of nearly 5,000 of the planes on order. It has continued to build the jets since the grounding, although at a reduced pace. But it has not made any deliveries. It also has not reported any sales of the 737 Max since the groundings.

“We are truly honored and humbled by the leadership at International Airlines Group for placing their trust and confidence in the 737 Max and, ultimately, in the people of Boeing,” said Kevin McAllister, CEO of the company’s commercial planes unit.
Before Tuesday, its most recent sale of commercial jets of any kind took place in late March. Earlier Tuesday it announced it had sold 30 of the 787 Dreamliner to Korean Air.

While the IAG sale is not finalized, it is a far more significant announcement than the Korean Air sale, and not just because the 737 Max has been the focus of so many questions and uncertainty.
Boeing and Airbus are a duopoly, basically controlling the commercial jet market for airlines around the world. But as much as they compete, it is typically very difficult to get an airline flying one manufacturer’s aircraft to buy versions of a competing aircraft. They prefer to allow pilots to move freely between all the planes that might be used on a specific route, and having two types of aircraft also increases the cost of parts and maintenance.