Icelandair considering potential Airbus order

Icelandair has openly stated that the carrier is evaluating a potential order for Airbus A321neo aircraft to replace its old and inefficient twin-jet 757 planes. The order for an Airbus plane could be the stepping stone for Icelandair’s possible all-Airbus fleet plan. At this point in time Icelandair is evaluating multiple options: stay with Boeing and continue replacing the 757 with the 737 MAX, introduce Airbus planes alongside the 737 MAX, or switch to an all-Airbus fleet.

Icelandair 737 MAX. Photo by Preston Fiedler | AeroNewsX

While the carrier has many options to choose from, the entire fleet consisting of Airbus is a more likely outcome as the worldwide 737 MAX grounding has dented the airlines' finances by $100 million. In 2019, Icelandair expected to operate 36 aircraft, nine of which should have been 737 MAXs, but in practice, following the worldwide grounding of the 737 MAX, the carrier was forced to make ends meet with only 33 aircraft. The 737 MAX should have provided 27% of passenger capacity in 2019 for the Icelandic carrier.

The Icelandair group reported a $39.3 million loss last year, an improved result compared to the $57 million loss in 2018. Despite the improvement, the financial result did not live up to expectations. Icelandair say that the worse than expected performance was caused by increased expenditure on fuel, maintenance and leasing because of the 737 MAX grounding.

The carrier is stepping into 2020 with a goal to increase its profitability and mitigate the operating risk of a potential further suspension of the MAX aircraft.

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