Icelandair Group and Boeing have signed a commitment for new aircraft

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Icelandair Group and Boeing have signed a commitment for 12 737 MAX8 and 737MAX9 aircraft with purchase rights for additional 12 aircraft.

This is a new variant of the Boeing 737 aircraft which will first enter service in 2017. The first delivery to Icelandair is scheduled for the first half of 2018.

The commitment is for 8 737 MAX 8 aircraft for 153 passengers in Icelandair‘s setup and 4 737 MAX 9 aircraft which hold 172 passengers. In comparison Icelandair‘s current Boeing 757-200 hold 183 passengers.

The commitment for all 12 aircraft is valued at $1,2 billion, or ISK 180 billion at Boeing list prices, but actual purchase price is confidential. The plan is to fund the acquisition partly by internal resources of the Company and partly by commercial banks.  The Company is in discussions with Export-Import Bank of the United States about possible financing support.  According to the Company’s projections the acquisition will not affect the Company’s dividend policy.

Boeing 737 MAX is a new, improved and longer reaching version of the present Boeing 737. The 737 Max incorporates new engines to deliver efficiency and will see 13%, per seat,  fuel-use improvement from today‘s aircraft. Fuel savings compared to Icelandair present fleet of Boeing 757 is more than 20% per seat.

Boeing 757 will continue to be Icelandair´s future aircraft, with the addition the new aircraft, as it suits the carrier‘s North Atlantic network reaching both Europe and North America, perfectly. The new aricraft will be a great addition to the fleet and increase flexibility and capability for growth. The 737Max can reach destinations on both sides of the Atlantic and gives Icelandair new options for added frequency and destinations, especially in winter to even out seasonality.

“This commitment is the result of our research into what aircraft manufacturers have on offer to help us strengthen and grow our fleet and our network towards the future. We have had a successful relationship with Boeing for decades and we are pleased to continue our cooperation for years to come”, says Björgólfur Jóhannsson, Icelandair Group president and CEO

Icelandair Group will hold a meeting for media and investors at 12.00 today, Thursday December 6th at Icelandair Reykjavik Natura Hotel.