Sonali Tiwary
IAG finalized a massive fleet expansion on May 9, 2025, ordering 32 Boeing 787-10 Dreamliners worth $13 billion and 21 Airbus A330-900neos valued at $8 billion at list prices. The deal includes options for 10 additional Dreamliners and 13 more A330neos.
Trade Agreement Sets Stage
The timing matters. This purchase came just one day after Washington and London signed a trade agreement removing tariffs on Rolls-Royce engines. Those engines power the Airbus portion of the order, while GE Aviation’s GEnx-1B engines will drive the Boeing aircraft.
US Commerce Secretary Howard Lutnick had hinted at the deal, mentioning a “$10 billion UK purchase of Boeing jets” during the trade announcement.
Delivery Timeline and Financial Details
Actual prices remain confidential, with IAG securing “substantial discounts” off list prices, according to multiple sources. Deliveries will stretch from 2028 to 2033, matching IAG’s retirement schedule for older wide-body aircraft.
The financing likely follows IAG’s established pattern—about 55% of its current fleet operates under leases rather than direct ownership.
Environmental Improvements Drive Decision
Both aircraft models bring substantial fuel efficiency upgrades. Boeing claims the 787-10 is 25% more fuel-efficient than the 767 models being replaced. Airbus states its A330-900neo reduces fuel consumption by 25% compared to previous A330-200/300 aircraft.
These improvements align with IAG’s environmental targets: a 15% reduction in absolute CO₂ emissions and a 27% reduction in emission intensity by 2030 versus 2019 levels. The company aims for 10% sustainable aviation fuel use by 2030 and net-zero emissions across all scopes by 2050.
Market Reaction Positive
Investors approved. IAG shares climbed approximately 1% in London trading following the announcement. Boeing stock has gained over 8% in 2025, boosted by growing jet demand and a healthy order book.
“Airlines need to think in multi-year timeframes: planes reach end-of-life and require long-lead-time replacements—Boeing and Airbus are sold out for years,” said Bernstein analyst Alex Irving.
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Part of Larger Fleet Overhaul
Thi ued at roughly $24 billion. That same year, IAG committed to up to 42 Boeing 777X wide-bodies to replace aging 747-400s.
IAG CEO Luis Gallego stated: “This order marks another milestone in our transformation programme and underlines our commitment to strengthening our brands and customer proposition.”
Maintenance and Training Impacts
IAG’s maintenance division will expand capacity for GE and Rolls-Royce-powered engines, potentially increasing third-party maintenance revenue. Pilot training for the 787-10 requires approximately 10-day simulator courses, which will be conducted at British Airways’ Heathrow training center.
European-Wide Fleet Renewal Trend
IAG isn’t alone in refreshing its long-haul fleet. Competitors Air France-KLM and Lufthansa are similarly modernizing with A350s, 787s, and 777-9s through 2030.
Trade tensions remain a background concern. The EU “is considering tariffs on US aerospace goods, including Boeing planes,” if US-EU negotiations falter, creating an uncertain backdrop for this transatlantic purchase.
Growth Trajectory
IAG forecasts 7% available seat kilometer growth in 2024 as it rebuilds capacity and invests in new narrow-body A321XLR aircraft for secondary long-haul markets.
S&P Global projects revenue passenger kilometers to reach 105–110% of 2019 levels this year and 110–115% by 2026, driven by leisure travel recovery and premium-cabin demand.
