London (AFP) – IAG, owner of British Airways and Spanish carrier Iberia, announced Friday a multi-billion dollar order for Boeing and Airbus planes, as it maintained its outlook despite economic uncertainty. Demand for air travel remains strong, IAG said, as US President Donald Trump’s tariffs assault threatens to hamper global growth and knock business confidence.
The announcement comes one day after Britain and the United States struck a trade deal to ease tariffs, during which US Commerce Secretary Howard Lutnick teased that Britain would announce $10 billion in new orders for Boeing planes. “We continue to see resilient demand for air travel across all our markets, particularly in the premium cabins and despite the macroeconomic uncertainty,” chief executive Luis Gallego said in an earnings statement. IAG announced new orders for 32 planes from Boeing and 21 from Airbus for delivery from 2028 to 2033. At list prices, the Boeing jets cost a combined $12.7 billion and the Airbus planes a total of $7.8 billion. But as is customary with sizeable orders, IAG said it had negotiated a “substantial discount”. The orders are in addition to those exercised in March for 12 Airbus and six Boeing planes, bringing the total number announced Friday to 71. “These new aircraft will enable IAG’s airlines to grow and replace their long-haul fleets,” the company said. Most of the new aircraft are replacements, with one third for growth of the company.
The orders followed a turnaround in IAG’s first quarter performance, which beat analysts’ expectations. Net profit came in at 176 million euros ($198 million) in the first three months of 2025, up from a four-million-euro loss after tax one year earlier. Revenue increased almost 10 percent in the first quarter. Shares in IAG rose more than two percent in reaction on London’s top-tier FTSE 100 index, which was up slightly overall in morning trade. The fresh batch of orders highlights “the group’s confidence in the longer-term picture for the travel industry,” said Aarin Chiekrie, equity analyst at Hargreaves Lansdown. “IAG shows no signs of slowing, and demand for its routes remains strong despite the current pressure on consumers’ incomes,” he added.
In 2024, the company’s full-year net profit increased three percent to 2.7 billion euros, compared with a year earlier. The latest orders provide some good news for Boeing, a top US exporter, which has recently been targeted by China in retaliation to Trump’s tariffs. China blamed the tariffs for a decision to stop accepting new Boeing aircraft, saying the levies had “disrupted the international air transport market”.
It follows a turbulent year for the US aircraft maker, with production and quality control problems, lawsuits, corporate upheaval, increased regulatory oversight, and a labour strike at a major factory. Boeing could also be hit by EU tariffs if US trade negotiations with the European Union fail.
© 2024 AFP
