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.

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Comments

  1. Unreal profits and £5 bottles of wine in F…. and so many of us still fly with them!

    • Dimitris says:

      I am very glad that it’s £5 wines. I wish they abolished them all together. Why do I have to subsidize your alcoholism problem? Alcohol is one of the most expensive items for other airlines so I prefer to pay less and not having this as a free perk. Well done to BA on this!

      • Suggesting someone has an issue with alcohol just because they (and I come to think of it) would like to enjoy a decent drop in the skies seems a bit of a stretch! As is the inference that BA are doing this for altruistic reasons only….

      • Booo!

      • I agree. Why should I have to pay to allow other people to take 96Kg of hold luggage? Why should I have to pay for other people to eat steak when i am a vegetarian? Why should I have to pay for BA to provide you with seat back TV when I take my iPad? Why should I have to pay for you to use the Elemis Spa when it is just pointless pampering? etc etc

        Other airlines and classes of travel are available!

      • How are you paying for someone else’s alcohol (or food, or amenities for that matter) if they purchased the ticket? What a baffling and curmudgeonly stance to take.

        I’m not a heavy drinker by any stretch, but I would expect that if something is going to be offered in First, then it should be of a high standard.

        • Dimitri says:

          I laughed a lot after reading the replies! Anyway, I did not mean to insult anyone so apologies of anyone got insulted. I certainly have no ‘losers’ grievance. I certainly enjoy my steak onboard! I just keep reading here and on FT about the free alcohol from certain people out of all the benefits, as well as seeing how much a few of them drink on board.. and honestly I would be surprised if they were not alcoholic. So nothing to do with the original commentator.

      • Hmmmm would you like to explain just how you are subsidising someone who has paid for a First class ticket?

        • his theory is that the price increases because their expenses do but I believe the difference would be they would just make more profit rather than a discount

        • Shoestring says:

          Dimitris is just voicing the ‘loser’ argument. He should be prouder of the positives: that the downsides to his life strategy are worth it for the positives, presumably in terms of longer lifespan and less aches/ pains/ diseases towards the end. [The problem being that if you extend your life by – say – 2 years through healthy living/ no alcohol etc, you will extend it by the last 2 years, when you are already pretty decrepit.]

          Back to the loser argument. We all go out to dinner as single people meeting up again. Most of us are party people at heart and love the chance to catch up with old friends – so we order steaks, big stuff, special stuff, celebratory stuff such as one of my BBQ Pit good ol’ Boys might have rustled up. We buy big. We drink big as well: some Champagne, some decent reds, some decent whites, some Cognacs, Single Malts, Armagnacs even.

          But there in the corner is the loser. He doesn’t drink alcohol. He’s a Vegan. He’s even a designated driver: that’s how much we like & respect him for his beliefs. He’s our mate – and that’s why we invited him – but he never gave us a dinner party as he knows we don’t eat peas as a main course. Plus he’s not quite as successful as us (these things run together), so he’s on a bit of a budget.

          Anyway, the evening is a great success and we have to divvy up the bill. 10 of us so it’s simple: divide by 10. Vegan boy has lost out big time, he’s actually only responsible for 3% of the bill – but dares not say anything that will put him in a bad light with these pals who have treated him fine this evening.

          Yet inside he gripes. Every time he rides on BA up front he gripes. For the rest of his life – he gripes.

          Because he *has* lost out versus the others, he *has* paid more yet got less in real terms, he will *never* get the chance to drink his airfare back in fine Cognac.

        • It’s fairly widely accepted that light to moderate drinkers (up to 7 units per week) live longer than teetotallers. I’m not sure whether saving up a month’s worth of units for a J or F flight has the same effect 😂

        • Back on the sauce at the moment are we………

    • TGLoyalty says:

      It’s £5 ex cellar pre bottle tax etc

      It’s probably a £15–20 bottle in your supermarket. Not mega expensive but what’s the point in the air where you can’t really tell the difference.

  2. Being pedantic it’s the B777-9 not B777-900. Also I doubt the seat count is firm this far out, there will probably be minor tweaks before it’s delivered.

  3. These will presumably have the same new CW seat that the a350s will have?

  4. I always wonder how good the discounts are when airlines order their new planes. It seems to be expected that these companies pay less than the list price, but I’m assuming they sign some kind of NDA so they can’t all discuss their discounts as a group, and make sure they get the lowest deal offered to each one!

    • An analysis business that works on such things estimated the real price at around $200 million, against a list of $432 million. I’m stating these from memory so………. I think that includes the engines. But I’m assuming much is about how you purchase and how you account for such things as maintenance. I think WW said they were buying a comprehensive maintenance package from GE, so maybe they paid for upfront to offset potential costs later.

      • $442m includes the engines. BA may well have done a deal based on ‘pay by the hour’ for the engines or similar, although as GE is the only supplier to the 777-9 BA has limited negotiating clout.

  5. “BA posted an operating profit margin of 15.1% in Q4 2018”

    surely the full year margin is a more useful metric … and on that score EI beats BA !

  6. Significant reduction in the number of premium seats compared with the Super Hi J 747

    747:- 14 – 86 – 30 – 145
    779:- 08 – 65 – 46 – 206

    Surprising shift for flagship routes such as LHR/JFK

    Less redemption seats in years to come.

    • A pity the 747-8i appears ill able to compete as few beyond Lufthansa and a couple of airlines in the Far East have taken it up I believe.

      747 remains my favourite.

    • 787-10 is the more logical long-term successor to the 747 on East Coast routes such as JFK.

      I don’t think they’ve confirmed the seat configurations for that yet.

  7. Horrible news, the 777 is the worst aircraft ever and cabin crews hate it. With 10 abreast economy passengers will likely hate it even more than the 787 too. Wish they had bought old a380s.

    • Agreed, I actively try to avoid 777’s.

    • But this is in many ways a new plane. The cabin pressure will be 6000 feet which is same as A350 and B787. The 777-9 10 across in economy will be more spacious than a 9 across 787. Obviously have to wait and see, but if they solve the one big dorm issue it could be good.

      • The dorm issue is, by far, the biggest problem. I think the 787 private 2-row cabin at the front in CW is underrated.

        • Bagoly says:

          I that “at the back of CW” / “in front of WTP” / “behind the second doors”?

          Does that not maximise one’s chances of a screaming baby, in either the front of those two rows, or at the front of WTP?

  8. engines nowadays are free, paying instead for thrust/mile + O&M costs. Hope I’m on new metal in my upcoming redemption flights!

  9. I’m surprised Julian hasn’t complained that BA is churning planes and that they should have got one type of plane and stuck with it 😂

    • the_real_a says:

      On a serious note, i`ve always wondered how they make such a “pick and mix” fleet economical. They pretty much fly every aircraft built. Surely an opportunity to standardise around an IAG short haul and long haul “plane” including seats and interiors?

      • It’s clear from comments on here that different folk prefer different planes. I suppose this way they cater for this and are not so affected if one type goes wrong (like with the 787).

      • There is a critical mass needed per type but once you got that it does not seem to matter. Also insured you against any cases of model-(wife)wide groundings.

  10. There’s a thread on FlyerTalk BA currently speculating the only way to get seat in the new First Cabin will be to buy a ticket. I bloody well hope not.

    • Paying money for flights? That will never catch on.

      • I’d wager the vast majority of this site won’t be paying £10k for a return F trip to Mexico or further.

        Hopefully their new CW offering is a big leap forward, as Squirrel said.

    • The Savage Squirrel says:

      If the new CW seat is a big leap forward vs existing offering ( comparable with or even better than current F), might demand for F fall?

      • We don’t know, we suspect it will be. First being revamped also. Speculation it’s moving up market a notch, certainly fewer seats, and that redemption offers will reduce.

        • Air France do it so I wouldn’t be surprised. I remember it being said before a couple of years ago by Willie or Cruz that F had quite a number of people on upgrades or redemption. It may be in the future it’s cash or redemption’s only by Gold or Silver card holder, with the number of reward seats being restricted a fair bit. With the new J class, I can’t see it being a massive problem.

  11. So does this rule out BA picking up second hand A380s? What do you think, Rob?

    • From the article.

      “British Airways is now done for the medium term, and I think we can forget any talk of additional A380 investment. “

      • apologies, skimming on a phone…..v disappointing – the A380 is in a class of its own – though I haven’t yet been on an A350….

        • Depends on what you want. A350 quietest, B787 and A350 best air quality least lag. 747 upstairs still my favourite by a distance.

    • Can’t see it happening now. If the extras do come it will be second hand.

    • At yesterday’s announcement Willie Walsh said “BA will not be buying any secondhand aircraft”. It’s unlikely BA will be able to place an order for new A380s at a fantastic price (Airbus have not budged on pricing), meaning we won’t see an increase in the number of A380s BA has in its fleet.

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