BA sale

British Airways orders 18 Boeing 777-9 aircraft – with First Class – to replace the 747 fleet

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IAG, the parent company of British Airways, has announced a huge order for Boeing 777-9 aircraft as part of the 2018 financial results presentation on Thursday.

There is a firm order for 18 aircraft with options on an additional 24.  An image from Boeing is below.  The aircraft will have GE9X engines from General Electric – this is the only option available as Boeing has chosen to only work with one engine manufacturer.

The list price for these aircraft is $442m each although BA will have secured a substantial discount.

BA’s confirmed 18 aircraft will replace 14 Boeing 747-400 and four Boeing 777-200 as they are delivered between 2022 and 2025.

The aircraft will have 325 seats across four cabins.  This means that First Class will definitely survive but as a smaller cabin:

  • 8 First
  • 65 Club World
  • 46 World Traveller Plus
  • 206 World Traveller

The existing order book contains 12 787s, four 777-300ERs and 18 A350s.  British Airways is now done for the medium term, and I think we can forget any talk of additional A380 investment.  

Willie Walsh, IAG chief executive, said:

“The new B777-9 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.  This aircraft will provide further cost efficiencies and environmental benefits with fuel cost per seat improvements of 30 per cent compared to the Boeing 747. It also provides an enhanced passenger experience”.

No-one has yet flown on a Boeing 777-9.  The aircraft was launched in 2013 and over 300 have now been ordered, but there have been no deliveries and we haven’t even had a test flight yet.  Emirates is due to receive the first in 2020.

It is the longest aircraft that Boeing has ever manufactured and has a range of 14,000km.  The windows are noticeably larger than on the existing 777 fleet and the ‘cabin altitude’ figure, which is linked to cabin comfort, is meant to be similar to the A350 and Boeing 787.  One novelty is folding wingtips.

One key point to note is that the aircraft is 10cm wider than the current 777 variants due to new developments in designing internal walls and insulation.  This allows the aircraft to have 10-abreast seating in Economy by default, albeit BA is refitting its existing 777 fleet to 10-across so this should allow slightly more space.

British Airways Boeing 777-9

IAG’s 2018 financial results

Looking at IAG’s financial performance, the numbers are undoubtedly good.  This is despite increased fuel costs and adverse FX movements.  Operating profit was €3.2bn on revenue of €24.4bn, of which the majority (£1.95bn) was from British Airways.  Iberia, Aer Lingus and Vueling contribute roughly similar amounts of profit in the €200m-€400m range.

BA posted an operating profit margin of 15.1% in Q4 2018.  No other brand comes close – Iberia is in 2nd place but could only manage 7.1%.

It is worth noting that BA posted an exceptional €678m gain due to cutting pension benefits in two schemes, although this is not included in the numbers above.

Across the entire group, passenger revenue per seat unit increased 2.4% at constant currency.  Costs, excluding fuel, fell by 0.8%.  Capacity – ie the number of seats available for sale – grew by 6%.  Net debt, including capitalised leases, remains low given the profitability.  Load factor (ie seats sold) increased from 82.6% to 83.3%.  There are now 573 aircraft in use across IAG.

Intriguingly, BA continues to state that there has not been a single case of fraud linked to the 2018 data breach.  It intends to defend the various ongoing lawsuits but in any event believes that it is covered by insurance for any claims.

The PDF results presentation is here if you want to take a look.

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Comments

  1. David J says:

    Hi – long time lurker. Where does BA state that there hasn’t been a single case of fraud as a result of the data breach?

    I’m almost certain – from personal experience – that that isn’t the case, given that over 2k disappeared from my account in a matter of minutes in late October 2018. Ironically, I was stood in T5 at the time…

  2. Nigel the Pensioner says:

    Isnt it telling that the last words to come out of Walsh’s mouth when describing the 777-9 (not X) order is “enhanced passenger experience”! He proves yet again that passenger comforts and experience are at the bottom of his priorities after cost cutting, cost cutting, cost cutting. Of course, Cruz doesn’t get a say; he just has to run what Walsh gives him and take the flack. Do we stand by for another underwhelming yesteryear product or will they have learnt from their A380 fit out?
    There will also be a load of second hand A380’s on the market from Qatar in about 4 or 5 years – watch Walsh snap them up!! At least the cabins will be superb!

    • guesswho2000 says:

      “There will also be a load of second hand A380’s on the market from Qatar in about 4 or 5 years – watch Walsh snap them up!! At least the cabins will be superb!”

      Then BA can rip them out and make J 8-across…

    • To be fair it was a financial results presentation…

      As for BA snapping up all the 2nd hand A380s as Calder was suggesting, I wouldn’t hold your breath on that one. Qatar may well be keen to use it’s influence to offload them as a significant shareholder but they have different engines to the BA fleet and BA will presumably be looking towards a long term strategy that has to account for the fact that it will never be able to replace them with anything even close in size.

      OTOH, a supply of replacement parts from those aircraft might be attractive to help keep the BA fleet going for the next 25 years.

    • Simon says:

      In a presentation the first and last items are what are most remembered by the audience. So the opposite is actually true.

      But don’t let get in the way of any anti BA bias!

    • It’s at the stage they can’t win. If he’d said it first someone on here would be claiming the ‘cheek of him putting passenger comfort in front of the cost savings when we all know what he was in about’

      BA (and IAG) are a business. A very well run one by the looks of it, they’re not here solely for your transport pleasure.

      If you don’t like it, fly with someone else, all this endless bleating, esp around the minutiae of PR press statements has become very tedious

      • Shoestring says:

        It’s tedious because the BA haters can’t seem to use their brains and go somewhere else.

        Their hate isn’t wanted as it is illogical and emotional.

        Nobody sane sees constructive criticism as a bad or unwanted thing – it helps form continual improvement – but when things get so bad that you hate everything about a company, your constant badmouthing it just makes you look rather stupid, when you are badmouthing things as acceptable as company PR, plane livery, engines not living up to expectations in terms of performance, cost-cutting measures, new routes/ old routes changed, accent of the customer service staff etc

        Why can’t you bog off somewhere else if you hate that company so much?

  3. Whilst I appreciate the help and advice I get from HFP each day I do find the BA issued press releases really dull. Today we have two, this, “jam tomorrow,” story, that BA is a master of peddling, and the other about painting their decrepit fleet in old livery. The livery is a bit of fun but it’s also part of a totally false story about them being a hundred years old. We know their not 100 as the Queen didn’t send a telegram!😛

    • Thywillbedone says:

      It’s staggering how much PR painting an historic livery on an aircraft seems to get (not a comment re HfP, but more generally). I believe it was Lufthansa who came up with the idea originally several years ago. Pity BA can’t do something interesting of their own.

      • There is a big sense of nostalgia in aviation. I type this sitting under a 1950’s BOAC poster, showing passengers in bow ties. I am a little young to remember the original ‘jet set’ era but if you’re in your 50’s you will remember a time when flying was something done only by the rich and famous and the media was filled with stories of people heading off to foreign lands which you would never, in a million years, get to visit. (My Dad never had a passport in his life.) This is what it taps into. I doubt anyone under 40 finds it interesting.

    • Shoestring says:

      @Paul – make sure you repeat yourself a few more times over the next few months in case somebody didn’t get it yet?

  4. Bonglim says:

    If the cabin is 10 cm wider, look for BA to try and find a way to go 11 across in economy!

  5. Just a thought OH and I went to visit the Boeing factory in Seattle last September. What an amazing place it was the way they produce those aircraft was very fascinating we saw the first 777-9 in there it was massive and they explained all about the folding tips.
    Hubby was in his element as he was an original RAF engine fitter and he was drooling by the end of the tour. By the way we saw two Concordes in a week, the one at Heathrow as we left and the other at Seattle, (love that aircraft).

    • Michael C says:

      “they explained all about the folding tips”

      I’m guessing so your clothes don’t get creased in your suitcase?!

  6. Rob – are they seriously claiming that there was no cases of fraud?

    I had my Virgin card used fraudulently for 3x £122 Harrods purchases and 1x £143.99 purchase twentythree clothing .com

    I called and advised them of such and then claimed it back via Virgin Money.

    • LewisB says:

      This article or the fraud paragraph has nothing to do with Virgin.

      • It does if you had your Virgin credit card info stolen in the BA data breach.

        There are no PROVEN cases of fraud. There are probably 100 HFP readers who have reported fraud on credit cards in the BA data breach. I think BA means no-one has ever been arrested for one of these frauds and then confessed to knowingly buying the BA card data on the dark web. Which does appear to be stretching the truth I agree ….

        • Thanks Rob.

          That makes sense – and a complete cop out in my opinion.

          Not sure BA’s claim that it’s a unrelated coincidence will stand up to any sort of scrutiny but time will tell.

      • Did you read the comment you’re trying to?

  7. Paulo says:

    It’s a bit sad that none of the 777-9 planes will have Rolls-Royce engines.

    • Blame Boeing. GE has the exclusive contract. Rolls also pulled out yesterday of Boeing’s new midrange project saying that basically ‘we can’t guarantee we can make an engine that will work’.

      • Well methinks they’ve amply demonstrates that o er the past few years anyway, but in their defence they did add ‘in the timescales required by Boeing’ to that, when tapping out.

        Side question,do you think that’s actually true or is it an aversion to another massive outlay into a big engine project so soon and before the Trent 1000 unpleasantness is behind them?

        • Genuinely no idea, but it is bizarre that a company which is shrinking itself down to focus on aero engines has withdrawn from one of the few major projects in the market – especially when you remember that they are effectively walking away from 20 years of business, given the life span of this new aircraft.

        • Shoestring says:

          According to what RR said yesterday, £1.3b is provision enough – so the financial unpleasantness is already in the price, so to speak

        • Travel Strong says:

          Surely blame Rolls, not Boeing? They have ultimately failed to deliver a fit for purpose product on one project (Trent 1000), and failed to deliver a competitive (or fit for purpose) offer on the others.

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