Boeing Inks a New Deal

Boeing (NYSE:BA) has signed a commitment valued at $1.2 billion with Icelandair Group for 12 new aircraft to be delivered in the first half of 2018.

Is This a Big Deal for Boeing?Iceland Air

With over 800 orders for its 787 Dreamliner in the pipeline (for a total value of over $180 billion) the deal with Icelandair Group is pretty small change. However, it’s worth pointing out that the Icelandair Group is not ordering any Dreamliners — the company’s getting in line for eight 737 MAX 8 aircraft and four 737 MAX 9 aircraft.

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The new planes will provide about 20 percent fuel savings per seat compared to the models currently in use, about the same savings a Dreamliner provides over its comparable aircraft.

“We have had a successful relationship with Boeing for decades and we are pleased to continue our cooperation for years to come,” said Björgólfur Jóhannsson, Icelandair Group president and CEO, in a statement.

This relationship could become increasingly lucrative for Boeing as Icelandair Group grows. The airliner reported a 16 percent year-to-date increase in passengers and a 16 percent increase in available seat kilometers. For the third quarter, the company reported an 8 percent year-over-year increase in income and a 0.7 percentage point increase in passenger load factor for the same period.

Chasing this news are reports that, for the first time in nearly a decade, Boeing is set to retake the global lead in jetliner deliveries from Airbus SAS. However, the good news could be overshadowed by a recently-discovered fuel-line problem in its Dreamliner aircraft that forced the landing of a United Airlines (NYSE:UAL) flight on Tuesday.

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