British Airways 200 737MAX order makes no sense without Gatwick

Something that makes the A320 more attractive to many operators over the 737MAX, is its ability to accept luggage in containers loaded into its hold. The 737MAX can’t accept luggage containers.

Many airports mandate the practice simply because of speed and security. Heathrow is one of them.

If British Airways leaves Gatwick, which is where most of the MAX’s were to be based, and which permits luggage loaded individually, then the 737MAX order is surely, mostly pointless.

BA weren’t planning on taking delivery of the first until 2023, with the last around 2027.

Even if the market has returned to 2019 levels by 2023-4, once you leave an airport like Gatwick going back is a far harder thing to do than just roughing it out by closing down and mothballing some of the operation. Others will move in, slots will get taken. Gatwick too has a business to run.

IAG had allocated some of the 737MAX aircraft to Vueling, but its recent purchase of AerEuropa has brought with it that airlines order for 25 more MAX’s, which were a firmed order. Those IAG hoped to negotiate away.

The order for 200 aircraft with Boeing was a letter of intent, it’s never fully been contracted. At the time BA/IAG negotiators had Boeing over a barrel, it was desperate and needed a customer, and offered huge discounts and flexibility to the group.

It’s either a too-good-to-be-true unmissable deal or something the group just doesn’t really need. Someone needs to decide, and IAG as a whole have implied that it all hinges on the viability of Gatwick, and wether or not air travel resumes at speed, or is a long slow, market return.

The problem is a Gatwick decision needs to happen sooner – very much sooner – than later. Could BA be about to make a very short term decision it will regret? Or are things so bad that it simply has no choice?

The one thing you learn about giant corporates is that money is all in the now, once the books are shut on the financial year, what they did before may have cost them millions. One change of policy and they’ll forget all about that and spend millions more undoing it, but it never matters, because it’s all about this years figures. It doesn’t matter what happened before and next year is, well next year.

Either way, it looks like Gatwick and Boeing will be the losers.