LONDON – Icelandair has announced a new deal with BOC Aviation to receive two new Boeing 737 MAX 8s.

The deal

The deal includes 2 new Boeing 737 MAX 8 aircraft, of which delivery will end in the fall season of 2023. This brings the total number of MAX to 20 planes.

The CEO of the Icelandair Group, Bogi Nils Bogason, said: “We are pleased to announce the new agreements with BOCA, a long-lasting business partner. Locking in these aircraft favorable on favorable terms enables the company to expand our fleet of Boeing 737 MAX and supports our future growth plans.”

“The aircraft offers excellent fuel-efficiency from previous generation aircraft which also contribute to our efforts of reducing the carbon emissions from our operations.”

This is a very significant deal for both Icelandair and Boeing, as it is showing the trust and commitment they both have in investing for both the future and the environment.

The deal also shows the trust Icelandair has in Boeing and the 737 MAX program, which was under big scrutiny following the 2 crashes by Lion Air and Ethiopian Airlines, which highlighted what corruption can do to safety.

Thankfully, these issues have been resolved, however, in the beginning, there was little trust from both the consumers and the airlines.

Luckily, Boeing has redeemed itself after they appointed a new CEO and other higher-ups and is now one of the fastest redeeming planes in the current times.

Icelandair

Icelandair has begun leasing the 737 MAX in February of 2022 after the airline found the plane to be satisfactory.

“We have been ramping up our operations, expanding our strong route network that connects Europe and North America via Iceland. This summer we offer direct flights from Iceland to 44 destinations, up to five times a day. This addition to our fleet allows us to further increase our services by adding new destinations and increasing frequency to our current destinations,” Bogason added.  

The 737 MAX is the successor of the airline’s 757 and 767, both of which have been part of the airline since the beginning. It has become high time for both planes to be replaced, and since the airline has been a loyal customer of Boeing for a long time, their best option was the 737 MAX.

They have been part of the fleet since 2018, but have not flown between the groundings in mid-2019 until early 2021.

These planes are going to be taking over the jobs the 757 and 767 once had, and that is to bring passengers via their home airport in Reykjavik to many destinations in both North America and Europe, a business model that has worked so well, that Anchorage-based Northern Pacific has taken over their business model.

To be in the defense of the business model, the only reason it works this well is because of the geographical position of Iceland and Alaska.

This does not automatically mean that they will be profitable, as shown with WOW Air, which became bankrupt because of overproduction per destination, using their A330 planes on short-haul flights.

While having a low cost per pax, these planes suffer from significantly high operational costs if they are being used on short-haul flights.