The parent company of British Airways has struck a $13bn (£9.8bn) deal to buy 32 new planes from the US aircraft maker Boeing, a day after a trade agreement with the US cut tariffs on the industry.
International Airlines Group (IAG) – which also owns Aer Lingus, Iberia and Vueling – said the Boeing 787-10 aircraft would be for its British Airways fleet and included the option of buying 10 more aircraft.
The “milestone order” also includes a near $8bn deal for 21 Airbus A330-900neo aircraft, which will be deployed across operations including Iberia and Aer Lingus. That deal includes an option to order up to 13 more aircraft.
The announcement came a day after the US agreed to scrap tariffs on Rolls-Royce jet engines, used on the Boeing and Airbus aircraft, which led to the company’s share price soaring by almost 4% in trading on Thursday.
However, IAG said the Boeing planes it had ordered would be powered by the US firm General Electric’s engines, meaning the contract would not have been subject to Trump’s new US tariffs even if a UK-US trade deal had not been struck. The Airbus aircraft will use Rolls-Royce engines.
Howard Lutnick, the US commerce secretary, said on Thursday that an unnamed UK company would buy Boeing planes worth $10bn.
On Friday, London-listed IAG said the list price of each Boeing aircraft was approximately $397m, based on January 2025 US dollar rates, giving the deal a headline value of $12.8bn.
The Airbus list price was $374m per aircraft.
However, IAG said that it negotiated a “substantial discount” from the list price on each of the deals.
“This order marks another milestone in our strategy and transformation programme and underlines our commitment to strengthening our airline brands and enhancing our customer proposition,” said Luis Gallego, IAG’s chief executive.
Separately, IAG said it had seen “some recent softness” in economy ticket sales by US holidaymakers in recent months. However, it said there was “strength” in premium tickets such as business class, which mitigated those effects.
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Gallego said: “We continue to see resilient demand for air travel across all our markets, particularly in the premium cabins and despite the macroeconomic uncertainty.”
IAG said first-quarter revenue rose by 9.6% to €7bn (£5.9bn) while operating profit increased by €130m to €198m.
Aarin Chiekrie, an analyst at Hargreaves Lansdown, said: “IAG shows no signs of slowing, and demand for its routes remains strong despite the current pressure on consumers’ incomes.
“Tariffs had been weighing on sentiment towards the travel sector. But with 80% of flights for the second quarter already booked, the outlook is brighter than many expected.”
IAG’s shares were flat in early trading on Friday.
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