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IAG puts in $5.4bn Airbus order with EADS

The order aimed at expansion of the Spanish budget airline Vueling.

International Airlines Group (IAG), the holding company of British Airways and Iberia, has placed an order worth about $5.4bn for up to 220 Airbus A320 family aircraft with the European Aeronautic Defence and Space Company (EADS).

As part of the order, IAG’s Spanish low-cost airline Vueling will receive about 120 planes, which will replace its existing fleet and expand its services.

IAG, which will receive discount on the list price of planes, will have an option of adding the remaining 100 planes to any of its airlines.

The ordered planes are expected to be delivered between 2015 and 2020.

Willie Walsh, CEO of IAG, said: “Vueling has managed to successfully expand its business profitably by targeting both growth markets and those areas where weak competitors are reducing capacity.

“These new aircraft will enable Vueling to continue that expansion and replace some of its older fleet with modern, fuel efficient aircraft, leading to further unit cost reductions.”

The order is subject to the approval of IAG shareholders.