British Airways orders 12 Airbus A380s and 24 Boeing 787s for $8 billion

Under pressure from all sides, state-owned British Airways (BA) has decided to walk the tightrope and order its renewal fleet of new aircraft from both Boeing and Airbus. The total order is valued at more than $8 billion.

British Airways said it would buy 12 twin-deck Airbus A380s and 24 midsize Boeing 787 Dreamliners to replace 34 of its Boeing 747-400 and 767 planes, some of which are nearly 20 years old. It also bought options for seven more A380s and 18 Dreamliners. Engines made by Rolls-Royce of Britain will power both aircraft types.

The order signals a strong vote of confidence in Airbus's troubled A380 superjumbo, which has experienced costly manufacturing problems and is scheduled to enter service with Singapore Airlines next month, two years behind schedule. It is the first order for the A380 by a new customer since 2005.

The British Airways chief executive Willie Walsh said that environmental concerns had been a prime factor in the choice of new jets, as the green movement, particularly in Britain, has seized on the aviation industry's contribution to carbon emissions. The deals represent the airline's largest investment in new planes since 1998, and are part of a plan to revamp its entire fleet of 114 long-haul jets over the next several years.

In choosing the Dreamliner, British Airways is also placing a big bet on the first commercial jet to be made of more than 50 per cent carbon fibre and lightweight engineering plastics, rather than the traditional aluminium alloys.

The Dreamliner has also suffered production setbacks. Test flights set to begin in September have been postponed to December, just five months before the jet's scheduled entry into service in May 2008.

The Airbus A380 order is a first for the airline, which till now has flown only Boeing jets on long-haul routes. Its main European competitors, Virgin Atlantic, Air France-KLM and Lufthansa, have already ordered the A380.

The first of the new planes is to be delivered in 2010. The airline will begin flying the A380 just a year after its continental European rivals, but three years before Virgin. British Airways' reputation among the flying public has suffered over the last year owing to congestion and baggage delays at Heathrow Airport in London, the carrier's overstretched hub, amid tightened security regulations.

Confidence was further eroded after British and United States regulators fined the airline $550 million in August for colluding with Virgin Atlantic to set the level of fuel-price surcharges on air tickets.

British Airways has stressed the environmental benefits of its purchases, saying the A380s would emit 17 per cent less carbon dioxide per seat than the 747-400s they will replace, while the 787s would be 30 per cent cleaner than the 767s. The airline also said it would contribute significantly to its target of improving fuel efficiency by 25 per cent between 2005 and 2025.

The airline said the planes ordered on Thursday 27 September would help it increase its overall seat capacity by as much as 4 per cent a year. The A380s could be configured to seat 440 to 450 passengers, a gain of more than 50 per cent over the 291 seats on the airline's high-premium 747-400s. Such capacity gains are critical at a time when Heathrow's two runways are nearing their capacity.

British Airways plans to fly the A380 on high-density routes to Hong Kong, Los Angeles, San Francisco and Johannesburg, while the 787s would help to open up new destinations in the United States and add flights to business centres like New York.