IAG Orders 71 Airbus and Boeing Jets to Modernize Fleet and Cut Emissions

IAG’s $10 Billion Fleet Renewal: A Strategic Leap Toward Sustainable Aviation

International Airlines Group (IAG), the parent company of British Airways, Iberia, Aer Lingus, and LEVEL, has announced a significant order for 71 widebody aircraft from Airbus and Boeing. The move signals a pivotal shift in the group’s long-haul strategy, aiming to modernize its fleet, reduce emissions, and expand capacity across transatlantic and Asia-Pacific routes.

Announced on May 9, 2025, the multi-billion dollar deal includes 32 Boeing 787-10s for British Airways and 21 Airbus A330-900neos for Aer Lingus, Iberia, or LEVEL. Additionally, IAG has firmed up previous orders for six Airbus A350-900s, six Airbus A350-1000s, and six Boeing 777-9s. Deliveries are scheduled between 2028 and 2033, with 35 aircraft designated for replacement and 18 for fleet growth.

This strategic move aligns with broader industry trends favoring fuel-efficient twin-engine jets and reflects IAG’s commitment to enhancing operational efficiency while navigating complex geopolitical and environmental considerations.

IAG’s Fleet Strategy and Historical Context

A Dual-Supplier Approach

Since its formation in 2011 through the merger of British Airways and Iberia, IAG has maintained a balanced procurement strategy involving both Airbus and Boeing. This approach mitigates supply chain risks and leverages competitive pricing. British Airways, for instance, has historically operated a large Boeing fleet, including the now-retired 747-400s, while Iberia was among the early adopters of the Airbus A350-900.

The latest order continues this strategy. British Airways will receive 32 Boeing 787-10s and six 777-9s, all powered by GE Aerospace engines. Meanwhile, Iberia and Aer Lingus will integrate 21 Airbus A330-900neos and six A350-900s, powered by Rolls-Royce Trent engines. These aircraft will replace aging Boeing 777-200s and Airbus A330-200s, which are less fuel-efficient and costlier to operate.

In addition to modernizing the fleet, IAG has secured 10 purchase rights for additional 787s and 13 for A330-900neos, providing flexibility to adjust future capacity based on market demand.

“This order is part of the Group’s ongoing investment in new, modern aircraft to drive operational efficiency,” Luis Gallego, CEO, IAG

Trade Dynamics and Timing

The timing of the announcement coincided with a new U.S.-U.K. trade agreement, prompting speculation about political motives. However, industry analysts suggest that negotiations for the aircraft began well in advance and were driven by operational needs rather than trade diplomacy.

By maintaining a balanced order book between Airbus (EU-based) and Boeing (U.S.-based), IAG insulates itself from potential tariff fluctuations and geopolitical uncertainties, a strategy particularly relevant in the post-Brexit era.

Furthermore, the inclusion of aircraft for multiple IAG subsidiaries highlights the group’s intention to optimize its long-haul network across different market segments, from premium to leisure travel.

Environmental and Operational Efficiency

Fuel efficiency and emissions reduction are central to IAG’s fleet renewal strategy. The Boeing 787-10 offers up to 25% better fuel efficiency compared to the older 777-200s, while the Airbus A330-900neo delivers approximately 14% lower fuel burn than previous A330 models.

These improvements are expected to reduce carbon emissions by 15–20% per seat-mile, contributing to IAG’s broader sustainability goals, including a net-zero target by 2050 and 10% sustainable aviation fuel (SAF) usage by 2030.

Operationally, newer aircraft provide enhanced passenger comfort, lower maintenance costs, and greater reliability, all of which contribute to improved financial performance and customer satisfaction.

Financial and Market Implications

Investment Breakdown and Deliveries

The total investment for the 71 aircraft is estimated to exceed $10 billion at market value, though actual costs are likely lower due to bulk purchase discounts. Deliveries will occur between 2028 and 2033, allowing IAG to phase out older aircraft gradually while scaling up capacity as demand recovers post-pandemic.

Of the 71 aircraft, 35 will replace aging models, while 18 are earmarked for growth. This balance supports IAG’s goal of achieving 4–5% annual capacity growth, particularly on transatlantic and Asia-Pacific routes where demand is rebounding.

British Airways currently operates 11 Boeing 787-10s and 18 Airbus A350-1000s, while Iberia has 22 A350-900s. The new additions will bolster these fleets and introduce the A330neo to IAG for the first time.

Market Reactions and Expert Opinions

Industry experts view the order as a calculated move. George Ferguson of Bloomberg Intelligence noted that IAG’s dual-supplier strategy mitigates geopolitical risks and supply chain disruptions, particularly given Boeing’s recent certification delays and Airbus’s production ramp-up challenges.

Analysts from One Mile at a Time highlighted that the A330neo order is a strategic win for Aer Lingus, which has long operated older aircraft. The new jets will enable the airline to compete more effectively on transatlantic routes against U.S. carriers like Delta and United.

CEO Luis Gallego reiterated that the order strengthens IAG’s core markets and supports its post-pandemic recovery strategy. He also emphasized the group’s broader fleet renewal, including narrowbody orders for 50 Boeing 737 MAXs and 59 Airbus A320neos.

“The A330neo order is a lifeline for Aer Lingus, which has long operated hand-me-down aircraft. Modern cabins and lower costs could help it compete with Delta and United on transatlantic routes,” One Mile at a Time

Industry Trends and Competitive Landscape

The aviation industry is increasingly shifting toward twin-engine widebodies like the Boeing 787 and Airbus A350, phasing out quad-engine models such as the A380 and 747. These newer aircraft offer 20–30% lower operating costs and are better suited for long-haul efficiency.

IAG’s investment mirrors broader trends seen at other major carriers, including Lufthansa and Emirates, both of which have also pivoted toward fuel-efficient twins. The group’s diversified brand portfolio enables it to target both premium and leisure markets effectively.

However, challenges remain. Boeing’s 777X program faces certification delays, and Airbus is under pressure to meet production targets amid global supply chain disruptions. IAG’s ability to navigate these hurdles will be critical in realizing the full potential of its fleet renewal strategy.

Conclusion

IAG’s $10 billion investment in 71 widebody aircraft marks a decisive step in its long-term strategy to modernize its fleet, enhance sustainability, and expand global reach. By leveraging both Airbus and Boeing platforms, the group balances operational needs with geopolitical and economic realities.

As the aviation industry continues its recovery from the pandemic, IAG’s proactive approach positions it well to capture emerging demand, reduce environmental impact, and remain competitive in a rapidly evolving market. The success of this strategy will depend on timely aircraft deliveries, effective integration into existing operations, and continued focus on sustainable growth.

FAQ

What types of aircraft did IAG order?
IAG ordered 32 Boeing 787-10s, 21 Airbus A330-900neos, and firmed up previous orders for six Airbus A350-900s, six Airbus A350-1000s, and six Boeing 777-9s.

Which airlines will receive the new aircraft?
British Airways will receive the Boeing 787-10s and 777-9s, Iberia will get A350-900s, and the A330-900neos will be distributed among Aer Lingus, Iberia, and LEVEL.

When will the aircraft be delivered?
Deliveries are scheduled between 2028 and 2033, allowing for phased integration and replacement of older aircraft.

What is the environmental impact of the new fleet?
The new aircraft are expected to reduce carbon emissions by 15–20% per seat-mile, aligning with IAG’s net-zero targets by 2050.

Why did IAG choose both Airbus and Boeing?
The dual-supplier strategy helps mitigate risks related to supply chains, pricing, and geopolitical tensions, while maximizing fleet flexibility.

Sources: FlightGlobal, Bloomberg, Reuters