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IAG to buy 18 Boeing 787 Dreamliners for BA

Iberia to cut 3,100 jobs.

International Airlines Group (IAG) is planning to buy 18 Boeing 787 Dreamliners in an effort to modernise the ageing fleet of its UK subsidiary, British Airways (BA).

The proposed deal, worth $4bn at catalogue prices, is a major boost Boeing, as most of the airline firms grounded their 787 Dreamliners in January citing safety concerns.

IAG was formed from the merger of British Airways and Iberia in 2011.

IAG’s loss-making Spanish subsidiary Iberia is planning to cut 3,100 jobs at Iberia, or 16 per cent of its workforce, in an effort to bring the airline into profits. IAG said an agreement with Boeing could lead to an order for 787s for Iberia, but added: “Firm orders will only be made when Iberia has restructured and reduced its cost base and is in a position to grow profitably.”

Iberia’s earlier proposals to cut 4,500 jobs were strongly opposed by trade unions. The airline, however, accepted a compromise plan in March to reduce the job cuts to 3,100.

Regulators also stopped the 787 flying after the battery on All Nippon Airways’ Dreamliner burned and the aircraft made an emergency landing in Japan.

Boeing 787 aircraft suffered overheating and battery problems in the recent past raising safety concerns. The US aerospace company, which is currently under the investigation of Federal Aviation Administration, has been working on improvements to the battery.

BA has placed an order to buy 12 Airbus A380 superjumbos and 24 787s to modernise its fleet in 2007.