BUSINESS Boeing lands huge British Airways order after A380's demise

BUSINESS

Boeing lands huge British Airways order after A380's demise

AFP

20:59, February 28, 2019

British Airways announced a multi-billion dollar order for up to 42 Boeing 777 fuel-efficient passenger jets on Thursday, just two weeks after Airbus said it would no longer make its A380 superjumbo.

BA.jpg

File photo: VCG

BA-parent IAG said its British carrier would purchase 18 777-9 planes made by the US giant, while an option for a further 24 of the aircraft could bring the total cost to $18.6 billion (16.3 billion euros) at list prices, before the usual heavy discounts are factored in.

It comes as IAG, which owns several airlines including Iberia and Aer Lingus, said that group net profits last year soared 45 percent to 2.9 billion euros on higher passenger numbers and lower costs.

Separately, UK engineering group Rolls-Royce said it dived into a net loss last year as its Trent jet engines were hit by costly repairs -- as well as the decision by Boeing's European rival Airbus to pull the plug on the A380.

Rolls posted an annual loss after tax of £2.4 billion ($3.2 billion, 2.8 billion euros) in 2018 that followed a net profit of nearly £3.4 billion a year earlier, as the group also decided to axe thousands of jobs as part of vast restructuring at the group.

The British company also said it no longer wished to be a candidate to make the engine for a new midsize passenger jet proposed by Boeing.

"Rolls-Royce has decided to withdraw from the current competition to power Boeing's proposed middle of the market -- or New Midsize Airplane (NMA) -- platform," Rolls said in a statement.

"While we believe the platform complements Boeing's existing product range, we are unable to commit to the proposed timetable to ensure we have a sufficiently mature product which supports Boeing's ambition for the aircraft and satisfies our own internal requirements for technical maturity at entry into service."

Chicago-based Boeing is looking at building an NMA, or single-aisle commercial jet for long-haul journeys, to fill a gap in the market -- but concrete plans have yet to be announced.

- Trent troubles -

On Thursday, Rolls said that costs linked to problems with its Trent 1000 engine that powers the Boeing Dreamliner stood at a higher-than-expected £790 million in 2018.

The Trent 1000 has seen some parts wear quicker than expected, forcing Rolls to carry out expensive repairs.

It added that last year's earnings were hit by an additional £186 million "following Airbus' decision to close the A380 production line".

On British Airways' big Boeing order, IAG chief executive Willie Walsh said in a joint statement: 

"The new 777-9 is the world's most fuel efficient longhaul aircraft and will bring many benefits to British Airways' fleet. 

"It's the ideal replacement for the (Boeing) 747 and its size and range will be an excellent fit for the airline's existing network," Walsh added.

Earlier this month, Airbus said it would stop building the A380 superjumbo, its competitor to the ageing 747.

Prior to Airbus' announcement, Walsh had said that IAG was "very pleased" with the 122 A380s operated by BA and called it an "excellent" aircraft.

However, Walsh had criticised the high cost of the A380, pointing to the "great competition" currently existing between aircraft manufacturers.

Speaking Thursday of the BA order, Kevin McAllister, president and CEO of Boeing Commercial Airplanes, said:

"The 777-9, in particular, simply has no competitor in its class when it comes to efficiency and performance. 

"It is the right-sized airplane for British Airways to efficiently serve long-range routes with heavy passenger demand." 

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