Hello All,
IAG announced today a large twin-aisle order. There is a new order for 32 787-10s, and options exercised for 6 A350-1000s and 6 777-9s at British Airways. There are also 6 A350-900 options exercised for Iberia. The remaining order is 21 A330-900s for Aer Lingus, Iberia, and Level. As is often the case, it is a mixture of replacement and growth.
British Airways’ order to replace 777-200ERs was highlighted earlier this year. In this blog post, we explain the airline group’s choice.
Mostly replacement at British Airways
British Airways’ 43 777-200ERs are well past 20 years. Due to the lack of near-term delivery slots, the carrier had to order sooner rather than later to avoid racking up large maintenance bills. British Airways now has orders for 39 787-10s. The follow-up order for 6 A350-1000s completes the replacement of the 777-200ER fleet.
The carrier also needs to replace its 16 777-300ERs and 12 A380s later. The order for 24 777-9s will partially replace those. It still has 18 777-9 and 12 A350-1000 options it could exercise depending on circumstances and how traffic evolves.
The 32 787-10s will be equipped with General Electric engines. British Airways has suffered from the Trent 1000’s lack of operational reliability, cancelling flights in recent months.
An aircraft better suited for seasonality and shorter missions
Iberia’s follow-up order for 6 A350-900s is not a surprise: it is for traffic growth and the replacement of older A330s. The carrier now has 9 A350-900s on order.
The order for 21 A330-900s is a major win for Airbus. The aircraft works well for the highly seasonal traffic patterns of Aer Lingus and Level (and Iberia to a lesser extent).
The airframe is less fuel-efficient than the Dreamliner but has lower capital costs, which make it easier to deal with demand seasonality. The A330-900 works well on missions up to 10 hours.
The added benefit is that IAG won’t have to spend material money re-training its current A330ceo flight crews.
The carrier operates 42 A330ceo aircraft: 15 at Aer Lingus and 27 at the combined Iberia / Level (Iberia operates Level’s flights). The group’s A330ceos are still relatively young because only two were delivered before 2005. However, the group has a sizable portion of A330ceos on operating leases. It might opt to replace them well before they reach 20-25 years.
Mostly Boeing in Great Britain, all Airbus in the EU
While some might think the order reflects a desire to “tariff-proof” its fleet plans, making the most sensible deal and limiting flight crew training costs are the main reasons. British Airways’ traffic is far less seasonal than Aer Lingus’ or Level’s. It therefore makes sense to invest in more fuel-efficient (and expensive) aircraft that will achieve high utilization at the British carrier.
