IAG and Boeing Agree $4bn Dreamliner Deal

Shaking Hands - Aleš Čerin

The parent of British Airways has reaffirmed its faith in the troubled Boeing 787 Dreamliner by sealing an order worth more than $4bn (£2.6bn) for the aircraft.

International Airlines Group said it had reached a deal with Boeing to convert options into 18 firm orders for the world's most advanced passenger jet, which is at the centre of a safety scare over its use of lithium-ion batteries. Boeing is confident the aircraft will soon be flying again after completing a successful test flight last week.

Customers including Thomson Airways and Virgin Atlantic have also backed the reliability of the plane, despite the grounding of the global fleet in January after two battery fires on operating aircraft.

The deal's value of between $4bn and $4.5bn includes engines made by Derby-based Rolls-Royce, in a boost for one of Britain's biggest manufacturers.

BA is expected to target growing markets such as south-east Asia with the jets, which have an 18-hour, 8,500-mile range due to their light, fuel-efficient structure.

IAG said the planes would replace some of BA's current fleet of Boeing 747 jumbos between 2017 and 2021. It is also in talks with the airline over ordering new 787s for its sister carrier, Iberia, but IAG said the Spanish airline must complete a cost-cutting programme before making a firm order.

Willie Walsh, the IAG chief executive, said: " The creation of IAG has resulted in greater buying power for both airlines through joint procurement and we have been able to obtain delivery slots for Iberia as part of British Airways' order."

Powered by Guardian.co.ukThis article was written by Dan Milmo, for The Guardian on Wednesday 3rd April 2013 20.15 Europe/London

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