Icelandair Adds More Airbus Jets To Fleet

Icelandair will take what is considered a more flexible approach to fleet renewal, thanks to a new move involving a leasing company that leases Airbus aircraft.

The Icelandic carrier has signed with Aircastle for a deal that’ll include adding six A320neo jets to its fleet and add another pillar to its growing narrowbody strategy, including Airbus jets as part of that.

The steady replacement of older metal, including Boeing planes, while supporting growth projections, has been a focus for the business for many years and is now starting to see execution through deliveries, continuing appetite for signings.

The A320neo Will Be Important For Icelandair

Icelandair committing to the A320neo on a lease represents a continued pivot away from just the A321LR and future A321XLR for single-aisle flying from 2029, with the A320neo carving out a role of its own within the operation.

While the A321neo and its derivatives are pitched at some of the longer transatlantic sectors that need range and payload, the A320neo is expected to serve some of the shorter and more flexible markets, similar to the effect of the 737 MAX.

Transatlantic flying is an important component for Icelandair, but it isn’t the only focus, and the A320neo’s smaller capacity and economics provide a better tool for thinner European services, and those schedules build on seasonal demand.

The balancing act of international transatlantic and European service is important in the make-up, not just to ensure connectivity from Iceland but also to follow the vital transit role the airline plays for those opting for the one-stop strategy through the country.

Icelandair has built this strategy for years, and the A320neo fits as the company relies on the broader family. Sharing commonality helps keep overall pilot training, maintenance, and the spare market relatively simple and intact in comparison to bringing on a new fleet type.

Leasing Offers A More Immediate Solution

The Aircastle deal flags the delivery of these aircraft sooner rather than later. The Pratt & Whitney-powered aircraft were manufactured between 2018 and 2020 and will be delivered and enter into service before summer 2028.

Additionally, the signing follows a recent lease commitment for four additional A320neos from AviLease, which are due in Spring. When factoring in the three A321LRs expected by the end of 2027, the Icelandair fleet is growing considerably with owned and leased jets from the next-generation of Airbus’ commercial airpanes portfolio.

However, with a requirement for new jets, if Icelandair wishes to purchase directly from Airbus or Boeing, it has to wait years, compared to transitioning sooner with the support of a lessor.

Demand for new aircraft has outpaced production growth at planemakers, meaning the backlog has sold out at nearly double the rate of output and pushing the first available slots for handovers into the 2030s. For those companies needing a more immediate capacity lift, this is a problem.

In Icelandair’s case, the removal of the Boeing 757 and 767 flags a commitment to accelerate fleet renewal to bring down costs. Thanks to this drive, the transition to newer jets more quickly is important to limit capacity loss and keep utilisation rates high without dropping frequencies.

While the A321LR and soon A321XLR are handy, more capacity is needed, and leasing, while expensive on paper compared with a direct purchase, can reduce the wait-time risk.