IAG

British Airways owner IAG has signed a letter of intent to place a large order for 737 Max planes, in a massive boost to Boeing.

Boeing is currently developing a software fix for its 737 Max planes, after two deadly crashes led to the planes to be grounded worldwide.

In March, an Ethiopian Airlines flight crashed, killing 157 people.

Just five months before, 189 people were killed on a Lion Air flight when a Boeing 737 Max also crashed.

The order for 200 planes from the IAG group will be a welcome show of confidence in the embattled aviation manufacturer.

Alongside British Airways, IAG operates Aer Lingus, Iberia and Vueling.

Should the deal go ahead, the planes would be delivered between 2023 and 2027.

The order of 737-Max 8 and 737-Max 10 planes would cost $24 billion at list prices, however it is understood that IAG have negotiated a substantial discount.

IAG chief executive Willie Walsh said: “We have every confidence in Boeing and expect that the aircraft will make a successful return to service in the coming months having received approval from the regulators”.

Nevertheless, it could still be a long way until regulators allow the 737 Max to return to the skies.

The US Federal Aviation Administration official said that Boeing 737 Max aircraft could be grounded until the end of the year, until faith is fully restored in the safety of the plane.

Boeing shares (NYSE:BA) were boosted by the news. Shares are currently +5.37% as of 11:53AM (GMT).

Meanwhile, shares in IAG fell, suggesting investors prove less confident of the airline group’s decision to add the controversial plane to its fleet. IAG shares are down 3.76%.