Icelandair orders up to 25 Airbus A321XLRs to replace its Boeing 757s

Icelandair Group HF has signed a memorandum of understanding with Airbus to buy 13 of its A321XLR aircraft with the purchase rights for an additional 12 jets in a blow to rival planemaker Boeing.

The aircraft deliveries should start in 2029 however Icelandair plans to start operating Airbus aircraft in 2025 and is in advanced talks for four leased A321LRs for that purpose, it said in a statement Friday Apr. 7. No financial terms were disclosed.

With the acquisition of the Airbus jets, Icelandair will complete the replacement of the Boeing 757, a cornerstone of its operations since 1990.

“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,” President and CEO of Icelandair, Bogi Nils Bogason, said. The new planes 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.”

Airbus has had a good run when it comes to beating out Boeing on plane orders. It’s secured substantial orders in China, where it holds a sizable advantage over Boeing, although the two shared the spoils from Air India Ltd.’s mammoth 470-plane order in February. US-headquartered Boeing did also edge out its European rival to win a narrow-body deal with Japan Airlines Co. last month, while scooping up a $37 billion order from Saudi Arabia’s Saudia airline and new carrier Riyadh Air.

Like Airbus, Boeing has grappled with shortages of engines, cabin equipment and labor after years of disruption caused by the Covid pandemic. However it also suffered badly from the global grounding of its 737 Max following two fatal crashes.

At the end of 2022, Icelandair operated an 31-strong fleet of Boeing jets for the absolute majority of its international operations.