IAG confirms aircraft orders from Boeing and Airbus despite Trump trade deal

IAG secures 71-plane deal from Boeing and Airbus, denies US-UK trade pact swayed jet purchase decision.

A Boeing Co. facility at Boeing Field in Seattle, Washington, on April 25, 2025. Photo by David Ryder/Bloomberg

By Alana Salsabila and Randy Ahmad

International Airlines Group (IAG), the parent company of British Airways, Aer Lingus, Iberia, Vueling, and Level, has finalized major aircraft orders from Boeing and Airbus — a move the group insists was not shaped by the new US-UK trade agreement unveiled earlier this week by President Donald Trump and Prime Minister Sir Keir Starmer.

The deal includes orders for 32 Boeing 787-10 Dreamliners designated for British Airways and 21 Airbus A330-900neo aircraft to be operated by Aer Lingus, Iberia, or Level. Additionally, IAG revealed that it had exercised purchase options for a further 18 planes — 12 from Airbus and six from Boeing — raising its total firm aircraft acquisitions to 71.

IAG confirms aircraft orders from Boeing and Airbus — encapsulates the central development in a week that saw political fanfare over a new transatlantic trade pact. However, IAG’s top leadership clarified that their multibillion-euro fleet expansion was rooted in long-term operational strategy and unaffected by the recent agreement between Washington and London.

Trade deal not a factor in IAG’s decision-making

US Commerce Secretary Howard Lutnick publicly welcomed the Boeing order on Thursday during the announcement of the new trade agreement but did not name IAG as the customer at the time. Despite the political backdrop, IAG Chief Financial Officer Nicholas Cadbury downplayed any causal link.

“It is helpful for us, but it wasn’t part of the decision,” Cadbury stated, reiterating that the aircraft orders were planned well in advance of the Trump-Starmer accord.

CEO Luis Gallego echoed this sentiment. “These plane orders reflect long-term planning,” he said, while acknowledging that any move to reduce tariffs on aircraft parts and materials would be “welcome.”

He added that tariffs on aerospace components — including a 10% base import duty and additional charges on key materials like steel and aluminum — have been a longstanding concern for the airline and manufacturing industries alike.

Aerospace sector awaits clarity on tariffs

Even as IAG confirms aircraft orders from Boeing and Airbus, UK aerospace executives remain uncertain about the specific terms of the new transatlantic trade deal. While government officials insisted all UK aerospace parts would be exempt from tariffs, industry leaders said key details were lacking from the public documentation.

“There was no mention of aerospace in the official draft documents,” one executive noted, adding that the sector is urgently seeking clarification on whether only UK-origin parts are exempt or if the exemption applies more broadly.

Given the highly integrated nature of global aerospace supply chains, the answer could significantly impact cost structures for airlines and manufacturers alike.

Orders driven by demand and fleet expansion needs

According to IAG, the new aircraft will allow the group to retire 35 aging jets while increasing its long-haul fleet by 18 aircraft. The Boeing 787s will be powered by General Electric engines, while the Airbus A330neos will use Rolls-Royce engines.

The acquisition supports IAG’s strategy to modernize its fleet and boost fuel efficiency while meeting sustained demand for long-haul travel — particularly across the Atlantic, where business and premium-class tickets remain strong revenue drivers.

Gallego said the group’s bookings remain “resilient across all our markets,” despite ongoing geopolitical uncertainty and recent questions about the transatlantic market’s health.

Financial results reflect post-pandemic momentum

IAG also reported robust financial performance for the first quarter of the year, with an operating profit of €198 million — a significant increase from €68 million during the same period last year. This performance was attributed to higher passenger volumes and a drop in fuel costs.

Despite the positive results, the group acknowledged the financial impact of a power outage at Heathrow Airport in March, which caused a day-long closure and cost British Airways approximately £40 million.

Since the pandemic, IAG has posted a series of record-breaking annual profits, driven by surging demand for air travel, particularly in business and first-class segments. However, the airline group warned of “some recent softness” in economy-class bookings by American holidaymakers — a potential early signal of changing consumer sentiment amid economic volatility.

Wider industry questions remain

While IAG confirms aircraft orders from Boeing and Airbus, broader questions persist within the airline industry about the ripple effects of Trump's trade policies and the potential for future disruptions. Airlines such as Air France-KLM, Lufthansa, and Virgin Atlantic have reported minor slowdowns in bookings for transatlantic flights, although none have attributed material revenue impacts to the Trump administration’s actions.

IAG, like its peers, is closely monitoring the evolving policy landscape and the possibility that tighter US border controls or retaliatory trade measures could influence traveler behavior.

Still, Gallego remains optimistic. “The appetite for flying is strong,” he said, reiterating the group’s confidence in long-haul travel and transatlantic resilience.

With this week’s announcement, IAG now operates a total fleet of 601 aircraft across its five airlines. The new orders — and the exercised options — underscore its commitment to maintaining operational efficiency, growing capacity, and addressing environmental concerns through newer, more fuel-efficient models.

The group emphasized that sustainability remains a core focus. While the orders were not explicitly tied to any new green mandates, the replacement of older jets with modern alternatives is expected to reduce emissions and operating costs over time.

Market reaction

Following the announcement that IAG confirms aircraft orders from Boeing and Airbus, investor sentiment appeared positive. IAG shares rose by 3% in Friday afternoon trading on the London Stock Exchange, reflecting confidence in the group’s strategy and future earnings potential.

Analysts noted that the sizable order shows IAG’s willingness to invest in growth even amid uncertain political and economic conditions, further reinforcing its role as one of the most influential airline groups in Europe.

As IAG confirms aircraft orders from Boeing and Airbus and brushes off suggestions that political developments influenced its decisions, the airline group has firmly positioned itself for long-term expansion. While the US-UK trade deal may provide marginal benefits, IAG’s focus remains on operational needs, fleet modernization, and delivering value to both passengers and shareholders.

With 71 new planes entering its portfolio and a solid financial foundation, IAG appears set to navigate the turbulence of geopolitics and economic uncertainty — cruising steadily toward future growth.