Boeing said it had reached an agreement to supply Icelandair with 12 737s

CHICAGO, Thu Dec 6, 2012 — Boeing said it had reached an agreement to supply Icelandair  with 12 737 MAX aircraft which have a $1.2 billion list price.

Icelandair said on Thursday it had purchase rights for another 12 aircraft. It planned to fund the acquisition from internal resources as well as loans from banks.

“The company is in discussions with Export-Import Bank of the United States about possible financing support,” it said. It noted that the $1.2 billion price was the list price and that the actual purchase price was confidential.

Boeing said it was finalizing the details, after which time it would post the deal as a firm order.

The airline is buying eight 737 MAX8 aircraft and four 737 MAX9 planes. The MAX aircraft are a variant of the Boeing 737 and will first enter service in 2017. The first delivery to Icelandair is scheduled in the first half of 2018.

“Fuel savings compared to Icelandair’s present fleet of Boeing 757 is more than 20 percent per seat,” the airline said.

Icelandair operates a fleet of 23 757 airplanes for both its passenger and cargo operations.

The airline reported a 20 percent rise in pretax profit in the third quarter to $64.8 million and has benefited from increasing tourism to Iceland.

It said in the quarterly report that the number of passengers on international flights rose 11 percent to 745,000 year-on-year.

Boeing may re-engine 737 if it cannot redesign the plane: CEO

CHICAGO ― Boeing Co. will retain the ability to re-engine the current model of its hot-selling 737 narrowbody aircraft if the company is unable to produce a completely redesigned version, Chief Executive Jim McNerney said Tuesday.

Speaking at the company’s meeting with investors in Seattle, McNerney said he expects technological breakthroughs that will enable a redesigned version that would be a big improvement over the existing design.

A redesigned plane would take longer to bring to market but would provide greater fuel efficiency.

Boeing has said its customers are calling for an all-new plane. But rival Airbus has said it would put a new engine in its competing A320 aircraft.

“We are going to retain the ability to re-engine if this new airplane doesn’t come together over the next nine months or so as we think it will,” McNerney told analysts at the webcast meeting.

McNerney, who expects a redesign, said Boeing is evaluating how big the next 737 should be. “As we think about it right now, it may be modestly bigger.”