IAG Picks New Airbus XLR to Expand Aer Lingus, Iberia Trans-Atlantic Services

(Bloomberg) -- British Airways-owner IAG SA ordered 14 of Airbus SE’s newly introduced A321XLR extra-long-range jets to expand trans-Atlantic operations at two of its core airlines.

The Spanish and Irish units of IAG, Iberia and Aer Lingus, will take 8 and 6 of the aircraft respectively, the company said in a statement. The deal is d at about $2 billion at a list price of $142 million per aircraft.

The order from IAG follows similar deals announced at the Paris Air Show, including from influential lessor Air Lease Corp., Saudi Arabian Airlines and Philippines’s Cebu Pacific. For Airbus, the deal marks another important endorsement for the aircraft type from a tactical buyer.

Aer Lingus, which already has orders for eight of Airbus’s long-range variant that’s already in production, has a “very ambitious” growth plan for which the XLR works well, Aer Lingus Chief Operating Officer Michael Rutter said Tuesday in an interview at the show. The airline wants the model not so much for its range of 4,700 nautical miles, the longest for any current narrow-body, but for the increased payload and operational resilience its extra fuel capacity would provide, especially in bad weather, he said.

Each aircraft will be fitted with economy and lie-flat business class seats and will be used by both carriers to open new translatlantic routes, IAG said in the statement. First deliveries are due in 2023.

Sister carrier Level, IAG’s long-haul discount division, sees a potential need for as many as 10 XLR planes to operate from bases in Paris and Barcelona, Level’s Chief Executive Officer Vincent Hodder said in an interview June 14 at the Paris Air Forum conference.

Air Astana JSC, whose long-range, light-traffic routes from Kazakhstan also favor narrow-body planes, said it has studied the XLR and doesn’t see a need for a big order. Singapore is the only destination where the new plane would make a difference compared with the LR version of the plane, which the airline has on order.

CEO Peter Foster said the carrier is frustrated by delivery holdups with that model, resulting partly from production issues but also delays in regulatory approval for a low-density version with a revised door layout, which Astana has specified. There should have been four LRs in the fleet by now, but the first won’t arrive until next month, he said in an interview at the Paris expo.

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