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May 29, 2024
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Icelandair has finally made up its mind and has decided to replace the Boeing 757 with the Airbus A321XLR. Although it might have been a no-brainer to many, the airline took a few years to determine whether the A320neo family or the Boeing MAX family suits bests for its requirements. Icelandair opts for A321XLR and -LR as 757 replacements.

In a media statement released late on April 6, Icelandair says that it has signed a Memorandum of Understanding with Airbus for thirteen -XLRs plus twelve options. With Airbus sold out until 2029, the aircraft will be delivered only that year. Financing options are still under review and will be decided closer to the delivery dates.

To bridge the six-year gap until the arrival of the first A321XLR, Icelandair intends to lease a number of A321LRs from 2025. The initial plan is for four aircraft but “further additions can be expected in the years thereafter,” the airline says.

CEO Bogi Nils Bogason said in February this year that a decision on the replacement of the 757 was to be expected before the middle of the year. Icelandair had been working on its long-term fleet strategy just before the Covid-pandemic started but suspended the plan until the autumn of 2021. Bogason said in September 2021 that it had relaunched the plan and was looking for a 757 replacement for longer routes. A decision was expected before the end of 2021, but in February 2022 Bogason said that a decision had been postponed until early 2023 as the airline needed more time. He reiterated this in October 2022.

Number of options on the table

During the 2021 results earnings call in February 2022, Bogason said that Icelandair was considering a number of options for the replacement of the 757s, which would leave the fleet by 2026. One was an all-MAX fleet, another a mix of MAX and some widebodies, and a third option a mix of MAX and Airbus A321LRs. The choice is now made for the -XLRs, with the -LR as an interim solution, depending on how long the aircraft will be leased. Usually, lease contracts run for at least ten years.

In the press release on the -XLR, Bogason says: “We are happy to announce that we have now reached a conclusion regarding Icelandair’s future fleet. We have decided that the capable and fuel-efficient Airbus aircraft, A321XLR and A321LR, will become the successors of the Boeing 757 we are gradually retiring. The Boeing 757 has been the cornerstone of Icelandair’s operations since 1990. Its unique capabilities have underpinned the successful development of our extensive route network and competitive transatlantic hub by leveraging Iceland’s unique geographical location to connect North America and Europe via Iceland. The excellent Airbus aircraft will not only allow us to further develop our proven business model around transatlantic flights but also open opportunities for future growth by entering new and exciting markets.”

Icelandair’s announcement came on the same day that Azerbaijan Airlines signed an order for twelve Airbus A320neo family aircraft as the preferred choice for its fleet renewal over the Boeing MAX, of which it had ten on order until mid-2019. The order was subsequently canceled and AZAL jumped ship to Airbus. Although Icelandair remains a strong MAX operator, losing the 757 replacement order to Airbus must hurt Boeing.    

author avatar
Richard Schuurman
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016. Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.

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