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June 13, 2024
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British Airways, through its parent, International Airline Group (IAG) confirmed the rumored selection of the A350-1000 for the British Airways fleet.  The order is for 18 firm orders plus 18 options as the carrier continues its long-haul fleet renewal and growth strategy.

The A350-1000 models will likely replace older Boeing 767 and 777 aircraft currently in service.  IAG, in this transaction, also secured future commercial terms and delivery slots for Iberia, which will be converted to firm orders after a successful restructuring at Iberia.

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Several elements of this order are quite significant:

1. This is somewhat a conquest for Airbus, as BA has been primarily  a Boeing 747, 767 and 777 operator for long-haul services.  While BA has had A380s on order since 2007, they have not yet taken their first deliveries.  With a second wide body type, Airbus will be well positioned with BA.

2. BA, as a key 777 customer, was a key target for the 777-X.  While the 777-X will be a larger aircraft than the A350-1000, it should have more competitive aircraft mile economics and better seat-mile economics, given its larger size, when introduced.  Was it simply timing for deliveries, or other factors that caused BA to move away from Boeing?

3. BA also has the Boeing 787 or order, but is yet to receive their first aircraft.  Given the massive delays, compensation negotiations, and continuing difficulties with that aircraft, could there have been an impact that crossed over from the 787 and caused a key customer to move to Airbus?

4. Of course, the A350 has Rolls Royce engines, which are British.  However, in recent years, airlines have been moving away from national content being a factor in aircraft decisions.

5. This order also includes delivery positions and commercial terms for Iberia, when the airline completes its restructuring and is ready to re-fleet.  We assume that IAG, negotiation for both carriers, reached a more favorable price point with the potential for a larger number of aircraft.  Could this 36 aircraft deal become 50, or even 72?  Quite likely.

The recent trend of primarily Boeing customers including Airbus in their fleet plans is growing.  The order at American Airlines seemed to break a logjam, with several all-Boeing carriers, including Norwegian and Lion Air, choosing Airbus.  The competition is getting hotter.  With Japan Air Lines now reportedly interested in the A350, could another long-term Boeing customer convert to Airbus?  It will be interesting to watch.

17 thoughts on “The Significance of the British Airways A350-1000 Order

  1. This is a bit of a flawed analysis imho. With fuel prices being high, the move to ideal aircraft for the ideal route is gaining momentum rather than existing loyalty. It’s a business after all where margins are low and highly volatile (linked to fuel prices). Unlike the narrow body segment where airbus has a seemingly better aircraft with more engine choices, widebodies show the different segments both OEM have targeted and what their strengths will be going forward. IAG is also rumoured to be a launch customer for the 777-9X. Having a mix of 787 (could those 18 converted options be 787-10?), A350-1000, 777-9x and A380,they will have a mixed fleet with the right aircraft for the right route.

    The only drawback is going to be a lack of flexibility. Currently 43 77E and 52 744 lets you swap equipment at will. Thoughts?

  2. Let me bite on that one. I was at CAPA 2 weeks ago and watched a certain CEO strut his stuff. It is very clear that IAG now believes it can manage an elite tier product and then damn the torpedoes full speed ahead. So the lack of flexibility doesnt really seem to worry BA which has different grades of service using the same aircraft. Frankly I dont think they will go for the 777X in the short term. You have to remember that BA has not had a happy experience with the 777 GE and indeed still has effectively 3 models of the plane in the garage. No one mentioned narrow bodies… i think that continues to have an influence.

    Also other commentators have said that BA is going to run these aircraft to replace the 744s which are looking a little long in the tooth. They are significantly older.

    So different speculation – BA is going to use its cash to throw BOTH the 744s and the early model 777s out with the bathwater. leaving a fleet that looks different.

    A380s for premium high density routes. (A must for Kangeroo) North America and possibly ZA as there are slot restrictions.

    A350s for replacing 777s of all types. Replacing 772s firstover time

    787s for tactical long haul thin routes.

    Airbus Narrows bodies (NEOs replacing CEOs).

    Voila IAG new. 3 brands mainline brands, plus ownership in FlyBE for regional.

    BA, IB, Veuling.
    Cheers

  3. Boeing has been close to launch the 777X for more then 5 years now.

    While everyone agrees the 777-200ER in the nineties and 777-300ER until now did very well, I have yet to see game changing figures for the 777X. It seems to come down to putting 10 abreast in the back and saying its a 747 sized 400+ seat “Mini Jumbo”. What if airlines think that 10 abreast on a 777X is not up to par with their 10 abreast A380s, 8 abreast A330s and 9 abreast 777s? Try the economics of 9 abreast 777X’s. Just a 2.7m /3row stretch with a new wing and efficient less powerfull engines.

    Apart from BA, more large 777 operators announced or will probably soon announce A350-1000 orders. United Airlines, Japan Airlines, Singapore Airlines, Air France, Cathay Pacific to name a few. Not unlikely further prospects are IMO e.g. Qantas, Lufthansa, China Southern and Turkish Airlines.

    Until now Boeing communicated they had time and first wanted to fully understand what the customers want and how the A350-1000 would look. It seems five past twelve again to me.

  4. With regards to 10 abreast on the 777x, most new 777’s are configured with 10 across. Even 9 across on a350 will not be as comfortable as 9 across on the 777 and most economy class customers purchase tickets on price, not comfort. So that point is rather moot. With some internal stretching, 777x will be a slightly more comfortable 10 across. This may not please cathay or singapore, but the rest including the gulf carriers will plough right ahead.

  5. “This may not please cathay or singapore, but the rest including the gulf carriers will plough right ahead.”

    Al, I doubt BA, Qantas, Singapore, LH will do it. They have 10 abreast A380, 8 abreast A330s and 9 abreast 777s. People will notice and it would create an inconsistent, unpredictable product for the passengers.

    Boeing of course is saying 10 abreast is fine. I would do the same if I was Boeing. Works great for CASM comparisons. Problem is its not up to Boeing to define economy class products and more then 75% of the passengers flies economy and thank god not all have cheap tickets.

  6. Qatar has 9 abreast 777 and 9 abreast 787 as well. Emirates has 10 across A380 and 777. Not sure why with some internal stretching, 10 across 777-9x won’t be appealing. All 3 you mentioned have 10 across 747 where the seats are a measly 17.5 inches wide compared to 17.0 in emirates 777. So .5 *10 = basically 5 inches more and it’s back to 744 or 747-8 seat comfort.

  7. My strong impression is that IAG wants to get the 747 out of its fleet ASAP. Although it has 787-8s on order to replace 767s, that’s not its priority.

    It will replace the 747 by a variety of planes to get the process completed as quickly as possible, at the expense of its previous fleet discipline. It might replace some 747s by 777-200s which are replaced in turn by a 787.

    It’s not keen to purchase more A380s so the 747s will generally be replaced by planes that are smaller, because these are available right now. Over time, and as planes like the 787-10, the A350-1000 and the 777-9X become available, the average plane size in the fleet may increase again.

  8. FF,

    I think you are correct about BA needing to get away from the 744s as soon as possible. However, the fastest way to do this would have been to lease 777-300ERs or order -8Is which could be had within a year’s time. A350-1000 is 4 years away at best. Most would argue that you can add at least a couple years to that. It may end up being a foot race to market between the 77X and 350-1000. As such, I would not underestimate the political pressures from RR and EADS to keep jobs closer to home. There is no question that this factored in heavily to their decision making process. Perhaps doubt about the long term health of the UK economy also factored into IAG preferring smaller aircraft (A350 & 787) to the larger Boeing offerings in the wide body market (77X and -8Is). Note the A380 decision was made back in 2007 when the world was a very different place from what we see today, most especially in Europe.

  9. What I do not get is how you replace a 747-400 with a much smaller aircraft? Even a 777-300 in normal configuration does not come close (not the max packed list). It makes little or no sense. The only candidates that replace the 747-400 are the 777-9 or the 747-8i

  10. “I would not underestimate the political pressures from RR and EADS to keep jobs closer to home. There is no question that this factored in heavily to their decision making process.”

    This seems to become less and less improtant and BA has bought exclusively Boeing widebodies since the sixties, until the A380s a few yrs ago.

    “What I do not get is how you replace a 747-400 with a much smaller aircraft? Even a 777-300 in normal configuration does not come close (not the max packed list). It makes little or no sense.”

    Correct. You see more announcements of A350s replacing 747s. Non-sense IMO. The 747s are mainly used on daily Asian flights. You can’t put a smaller twin in its place without surrendering market share. You can only replace it 1 for 1 by the 747-8i or A380.

    For a BA 777-9i. It adds 2.7m / 3 rows, so the seatcount for BA would be about 299+27 ~320-325 seats (extra galley, lavatory space). The 407 seat Boeing “Mini Jumbo” numbers are for PR.
    http://www.seatguru.com/airlines/British_Airways/British_Airways_Boeing_777_300.php

  11. I really do not think your hypothesis has any validity. BA is a well won company and does not have a history of making orders based on politics.

    Why lease an 777-300 and receive it in a year only to have an outdated plane almost immediately when you can get to the front of the queue and get the next hot thing before anyone else?

    Why can’t some people not accept that the A350 is an excellent product which was purchased on merit?

  12. Because the 747 is too big for many of the routes it flies.

    The 747-8 is a flop that will be exterminated by the upgraded 777.

  13. Mate, there is no other reason for the BA to order the paper plane A350-1000
    To help Rolls Royce of course.. The A350 -1000 is slotted between the 787-10 and 777X. There won’t be a whole lot of room there to compete against two already strong competitors. In short ,the A350-1000 will never enjoy a free run in the market which 777 had for 17 years and will until 2018.

  14. Wouldn’t it have been nice if Airbus had gone after the Dreamliner sooner and had the A350-1000 ready for the Paris Airshow? I see Boeing has already got orders for it’s 777x-won’t take them long to get a grip back on the market. Plus RR needs an engine in 120,000 thrust range soonest. I bet GE will announce one soon.

  15. BA has been a Rolls Royce buyer for years and not just now. If BA bought any 777x,it would HAVE to have GE engines because Boeing shut the door on Rolls Royce after a $500,000 bung for GE for exclusivity!!

  16. BA would be hit very hard in the North American market if it chose Airbus for these routes. Airbus for east routes and Boeing for west routes. BA must also consider that it cannot only use Heathrow and ignore Manchester. Most passengers from the north can avoid Heathrow and fly with excellent foreign carriers.

  17. BA has ordered both Boeing and Airbus aircraft-why would it be hard hit,when its very first flight of the A380 is to LAX? BA are not stupid,they understand Manchester as much as Heathrow. Heathrow is already at 98% capacity,with incoming early morning traffic using both runways,one which is shared with out going traffic! I’m sure,Manchester will be much more used in the future. The real problem are the politicians who really can’t get their act together on an increased size Heathrow or a brand new hub somewhere else in the south.

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