IAG SA will order as many as 42 Boeing Co. 777 jets valued at up to $18.6 billion, handing the U.S. planemaker a victory over rival Airbus SE as it replaces its aging long-haul fleet.
British Airways will take 17 of the largest 777-9 version of the wide-body jet, the company said in a statement Thursday. IAG also took options on an additional 24 of the aircraft, which carries a list price of up to $442.2 million before customary discounts. Bloomberg News reported earlier that IAG was leaning toward Boeing.
IAG advanced as much as 4.1 percent, as the London-based company reported annual profit that beat analysts’ estimates.
British Airways will use the planes to replace its fleet of 34 aging 747s, which are due be retired by early 2024. Airbus had pitched the A350-1000, which BA has already bought to meet an earlier requirement, to fulfill part of the order.
The order for the re-winged 777-9 version of the Boeing wide-body provides a lift for the program, ahead of the revamped model’s factory roll-out and first flight this year. Sales of the new planes have sputtered after an initial order flurry.
The endorsement by one of the world’s premier airlines gives new lift to the 777X program ahead of the upgraded model’s factory roll-out and first flight this year. Analysts have questioned the size of the plane, which features the longest wings ever produced by Boeing and can seat upwards of 400 travelers, as sales sputter after an initial order flurry.
The order was announced as IAG reported adjusted operating profit advanced 9.5 percent to 3.23 billion euros ($3.7 billion) in 2018, ahead of the 3.15 billion-euro average estimates of analysts. Revenue rose 6.7 percent to 24.4 billion euros.
“This was a very good performance despite three significant challenges: fuel prices increasing 30 percent, considerable air-traffic control disruption and an adverse foreign exchange impact of 129 million euros,” Chief Executive Officer Willie Walsh said in the statement.
Earnings this year are forecast to be flat, as long as fuel prices and exchange rates stay steady, the company said.
The shares were up 3.4 percent to 620.60 pence as of 8:09 a.m. in London.