LONDON – In the airline’s financial statement for the third quarter of the year, Icelandair (FI) has stated it expects to take delivery of three Boeing 737 MAX aircraft in the first half of 2021. FI currently has six of the aircraft type in its fleet, which have been grounded since last year.
Due to compensation arrangements made with Boeing, the airline will receive in total another six instead of another ten on top of reduced prices for the aircraft.
Out of the remaining six, three will be delivered by the second quarter of next year with the other three due to be delivered in the fourth quarter of that same year and the first quarter of 2022.
“Furthermore, the settlement provides additional compensation for Icelandair which covers a substantial portion of the damages incurred from the suspension and will mostly be realized by Q2 2021. This agreement strengthens Icelandair Group’s liquidity position and allows for more flexible fleet planning in the upcoming years.”
“The MAX aircraft continues to be an important element of the Company’s plan to strengthen its business and increase flexibility and capability for growth.
A Boost for the 737 MAX?
This is a significant and much-needed boost for the program, as FI becomes the most recent carrier to state potential delivery dates for the aircraft. Earlier this month, American Airlines (AA) stated that it expects its aircraft to return to service in December, offering confidence that the aircraft could be back in the air by year-end.
Irish low-cost carrier Ryanair (FR) also said something similar, expecting delivery day for its MAX 200 Gamechanger aircraft to be in January or February next year as well as expecting to have 40 units of the type by the Summer 2021 season.
Airlines coming out publicly about the aircraft could offer some speculative thought that the aircraft is ready to be certified worldwide.
Improvements Towards Year-End?
For Icelandair, like with other carriers, it has been quite the shaky year, consisting of battles within the airline and more. One instance was when FI fired all of its flight attendants as well as having to sign collective agreements with the union of FFI.
The airline has also had to sell three of its Boeing 757s for freighter conversion, as it tried to acquire some revenue on the cargo front during the COVID-19 pandemic. The only element of positive news has have been the codesharing arrangements and partnerships with the likes of airBaltic (BT) and easyJet (U2).
Either way, it remains clear that the 737 MAXs that will be delivered will no doubt be useful assets to FI and its future operations going forward, especially as its 757s get older.
The COVID Question
Of course, the COVID-19 pandemic continues to come into a discussion about any segue of the airline industry. This time, the question that can be posed is whether the aircraft will be fully utilized in 2021 or not?
At the moment, Icelandair is only operating around nine per cent of its passenger schedule for the third quarter of this year, with passenger numbers down 90%.
With revenues also down by 81%, there is a slight chance that if a vaccine is not found in time, then the new aircraft may not even be used for a substantial period of time.
And such themes of low capacity resonate with the words of political leaders around the world, including the likes of French President Emmanuel Macron who suggested that this pandemic will see the country and the globe into the Summer next year.
Featured Image: Icelandair Boeing 737 MAX. Photo Credit: Icelandair