British Airways' IAG to order up to 42 Boeing 777 jets

British Airways will take 17 of the largest 777-9 version of the wide-body plane, the company said on Thursday, part of an order worth $18.6bn

British Airways, a unit of IAG, is set to take 17 of the jets ordered. Bloomberg

IAG will order as many as 42 Boeing 777 jets valued at up to $18.6 billion, handing the US plane maker a victory over rival Airbus as it replaces its ageing long-haul fleet.

British Airways will take 17 of the largest 777-9 version of the wide-body jet, the company said on Thursday, confirming a Bloomberg News report. IAG also took options on an additional 24 of the aircraft, which carries a list price of up to $442.2 million before customary discounts.

IAG advanced as much as 4.1 per cent, as the London-based company reported annual profit that beat analysts’ estimates.

British Airways will use the planes to replace its fleet of 34 ageing 747s, which are due be retired by early 2024. Airbus had pitched the A350-1000, which BA has already bought to meet an earlier requirement, to fulfil part of the order.

The order for the re-winged 777-9 version of the Boeing wide-body provides a lift for the programme, ahead of the revamped model’s factory roll-out and first flight this year. Sales of the new planes have spluttered after an initial order flurry.

The endorsement by one of the world’s premier airlines gives new lift to the 777X programme ahead of the upgraded model’s factory roll-out and first flight this year. Analysts have questioned the size of the plane, which features the longest wings ever produced by Boeing and can seat upwards of 400 travellers, as sales faltered after an initial order flurry.

"The new 777-9 is the world's most fuel efficient long-haul aircraft and will bring many benefits to British Airways' fleet," said IAG chief executive Willie Walsh.

"It's the ideal replacement for the 747 and its size and range will be an excellent fit for the airline's existing network," he added.

Speaking of the Boeing-BA deal, Kevin McAllister, president and CEO of Boeing Commercial Airplanes, said: "The 777-9, in particular, simply has no competitor in its class when it comes to efficiency and performance.

"It is the right-sized airplane for British Airways to efficiently serve long-range routes with heavy passenger demand," AFP reported him as saying.

The order was announced as IAG reported adjusted operating profit advanced 9.5 per cent to €3.23 billion (Dh13.5bn) in 2018, ahead of the €3.15bn average estimates of analysts. Revenue rose 6.7 per cent to €24.4bn.

“This was a very good performance despite three significant challenges: fuel prices increasing 30 percent, considerable air-traffic control disruption and an adverse foreign exchange impact of €129 million,” Mr Walsh said.

Earnings this year are forecast to be flat, as long as fuel prices and exchange rates stay steady, the company said.