IAG, British Airways Commit to A350s

 - April 22, 2013, 12:25 PM
British Airways would fly at least 18 A350-1000s as part of IAG's plan to retire its subsidiary's Boeing 747-400s.

International Airline Group (IAG) and British Airways have signed a memorandum of understanding (MoU) calling for the purchase of 18 Airbus A350-1000s along with options on another 18, Airbus announced Monday.

The choice of the A350-1000 follows British Airways’ decision in 2007 to buy 12 Airbus A380s, the first of which it expects to take this summer. “Operating the A380 and A350 together delivers real value to the world’s leading airlines because it allows them to match aircraft capacity to traffic demand on any route,” said Airbus.

The A350 commitment comes less than three weeks after IAG confirmed that it reached an agreement with Boeing that calls for the conversion of options on eighteen 787s to a firm order. It has already placed a firm order for 24 Dreamliners for its British Airways subsidiary. Assuming the successful conclusion of the contracts, IAG plans to use the first 18 A350s along with the Boeing 787s for which it holds commitments to replace 30 Boeing 747-400s between 2017 and 2023. If exercised, the options on the A350s would account for further replacement and fleet growth, said IAG.

“The A350-1000 will bring many benefits to our fleet.” said IAG chief executive Willie Walsh. “Its size and range will be an excellent fit for our existing network and, with lower unit costs, there is an opportunity to operate a new range of destinations profitably. This will not only bring greater flexibility to our network but also more choice for our customer.”

As part of the group’s ongoing long-haul aircraft fleet renewal and modernization strategy, IAG has also secured commercial terms and delivery slots with both Airbus and Boeing that could lead to firm orders for A350s/787s for its Iberia unit. The company said it would place those orders only when Iberia puts itself in a position to grow profitably, following its restructuring and cost-reduction exercise.

Workers at Iberia called off plans for the third in a series of walk-outs in late March after the Spanish government persuaded them to accept new contract terms from IAG. Originally proposing to shed more than 3,800 more jobs, IAG agreed to pare that number to about 3,150. Two weeks later the then-CEO of low-fare unit Iberia Express, Luis Gallego, replaced Rafael Sanchez-Lozano as Iberia’s chief executive.