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International Airlines Group, the owner of British Airways, has ordered 53 wide-bodied planes from Boeing and Airbus in a bet on continued strong demand for long-haul flying.
IAG, the owner of five airlines, on Friday announced the order for 32 Boeing 787-10 aircraft for British Airways and 21 Airbus A330-900neo aircraft, which it said would be flown by Aer Lingus, Iberia or Level.
Howard Lutnick, the US commerce secretary, had welcomed the deal for the Boeing planes on Thursday as the US and UK announced a trade deal, without naming IAG as the buyer.
On Friday, IAG reported operating profit of €198mn for the first three months of the year, up from €68mn a year ago, boosted by higher passenger revenues and lower fuel costs. The day-long closure of Heathrow airport in March because of a power cut had cost BA about £40mn, IAG said.
IAG has report a series of record annual profits since the pandemic, helped by strong demand from business and first-class passengers for long-haul flights, particularly across the Atlantic. However some airlines have recently started to pointed to cracks in demand amid US President Donald Trump’s trade war.
IAG said on Friday that appetite for flying remained strong despite macroeconomic uncertainty. But it warned of “some recent softness” in economy tickets bought by holidaymakers in the US.
The aircraft orders announced on Friday will allow IAG to replace 35 of its older planes and increase the size of its long-haul fleet by 18 aircraft.
The orders also include options to buy up to 10 more Boeing 787 aircraft, and up to 13 additional Airbus A330s. The Boeing aircraft will be powered by General Electric engines and the Airbus planes by Rolls-Royce.
“Looking ahead to the next decade, these new aircraft will enable us to strengthen our core markets and further improve our customer experience,” said Luis Gallego, IAG’s chief executive.
The airline group on Friday also disclosed that in the first quarter it had exercised options from a previous order to buy six Airbus A350-900 aircraft for Iberia, six Airbus A350-1000 and six Boeing 777-9 aircraft for BA.
The combined new orders amount to an additional 71 planes, on top of the 601 planes that IAG’s five airlines at present operate between them.
IAG has faced questions from analysts and investors over the strength of the transatlantic market following the uncertainty caused by Trump’s tariffs and concerns that travellers will be put off by more hostile US border patrols.
On Friday, Gallego said that bookings remained “resilient . . . across all our markets”, particularly in business and first class. IAG said strong sales in its premium cabins had mitigated the challenges in securing economy bookings from US holidaymakers.
Several other airlines including Air France-KLM, Lufthansa and Virgin Atlantic have warned of similar dents to demand across the Atlantic, while saying that overall Trump’s policies had not yet had a material impact on demand for flying.
IAG shares rose 1 per cent in morning trading in London.
