Icelandair will decide before the end of the year which aircraft type will replace its Boeing 757-fleet, CEO Bogi Nils Bogason said on September 8 in an interview with Center for Aviation (CAPA) Live. He confirmed that the airline has restarted its long-term fleet strategy after putting plans on hold during the Covid-crisis. Icelandair to decide on 757 replacement this year.

The fleet plans focus on the replacement of the 757, of which the Iceland carrier has had 24: 22 757-200s and two -300s. The -300s are all back in service but of the -200 nine have been parked. In 2020, the airline phased out three aircraft and sold for freighter conversion and four more were retired and parted out. The plan was to reduce the number to ten aircraft by 2022. As the 757s are aged between 20 and 25 years, despite low ownership costs, replacing them has become urgent. Bogason said Icelandair also wants to reduce emissions by replacing them with current-generation and more fuel-efficient aircraft. Thanks to the 16.6 percent share from Bain Capital, the airline has now better resources to finalize the plans.

“Just before Covid hit us, we were working on our long-term fleets strategy, but we put that project a bit on hold, we can say, during the pandemic. But now we are restarting the project and we are focusing on what aircraft will replace the 757 for the longer missions”, Bogason said. “We are now reviewing our long-term strategy which aircraft will replace the 57, and which aircraft we will use for destinations like Seattle, Portland, Orlando, and so on, going forward. And the plan is to conclude this work before the end of this year.”

Pre-pandemic, the MAX was the favorite

Before the pandemic, Icelandair was expected to replace the 757 with the MAX 8 and 9, as the type was suited for most of its operations to Europe and North America. Icelandair currently has six -8s (of which one is parked) and three -9s (two parked). It will take delivery of three more in Q4 2021 and Q1 of 2022 to bring the MAX fleet to twelve. In August 2020, Icelandair canceled orders for four MAX at the same time it announced that it had reached a settlement with Boeing on compensation for costs after the grounding of the type from March 2019.

Bogason told CAPA that he is most satisfied with the MAX: “We are very pleased with the performance of the Boeing 737 MAX and the aircraft has outperformed expectations, both regarding range and fuel efficiency. Of course, it goes hand in hand. And the CO2 emission is about 36 percent lower than on the 757 so we are extremely happy with the performance of the automatics. And the aircraft is, of course, much more environmentally friendly than the 757.”

While the MAX suits 85 percent of Icelandair’s routes, it hasn’t the capabilities to replace the 757 on the network to the US West Coast. The airline could use its 767-300s, which are no part of the upcoming decision on fleet strategy, Bogason said. Two 767s will be converted into freighters, which leaves the airline with two aircraft in passenger configuration.

 

Play Airbus A321neo

New rival Play is using the Airbus A321neo. The A321LR will have the range to replace Icelandair’s 757s to the US West Coast. (Play)

So Icelandair needs a replacement for the 757s, especially as Bogason is optimistic that post-pandemic, Iceland will become the tourist attraction again it was a few years ago, with travelers stopping over for a few days before they continued their journeys to either the US or Europe. “We can connect the secondary cities in Europe with secondary cities in North America on a very fuel-efficient, narrow-body aircraft, so those markets work very well together”, Bogason told CAPA.

The A321neo has the range to do the US West Coast

Without making any reference to a specific type, it is clear from his remarks that Icelandair must be seriously contemplating the Airbus A321neo and its LR or XLR variants. It’s no secret that the MAX can’t offer the same range as the A321neo does, with the MAX 8 and 9 doing 3.550 miles (6.570 kilometers) with 168-193 seats. This compares to 3.500 nm for the standard A321neo but with 240 seats in a single-class configuration, 4.100-4.500 nm (7.400 kilometers) for the A321LR, and even 4.700 nm (8.700 km) for the XLR. If you want to do Reykyavik to Los Angeles, you need an aircraft that can do 4.300 nautical miles.

Icelandair will have a good look at what new Icelandic competitor Play has in mind. The airline plans to start services into the US and Canada in the summer of 2022 and recently filed an application with the US Department of Transportation. Play is using the standard A321neo and has said it will not add the LR or XLR to its fleet. If it wants to rival Play, it would be the obvious choice for Icelandair to fight them with the same tools. This makes an Airbus order from Icelandair a no-brainer.

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