IAG Said to Seal Long-Range Airbus A321Neo Order for Aer Lingus

  • Transaction may be announced with annual results next week
  • Planes will replace ageing Boeing 757s on trans-Atlantic trips

IAG SA has sealed a deal to take seven long-range variants of Airbus Group SE’s A321neo single-aisle jetliner for Irish arm Aer Lingus, people with knowledge of the agreement said.

The transaction may be unveiled on Feb. 24 when British Airways parent IAG reports full-year results, according to the people, who asked not to be named as the details aren’t yet public. The company is likely to take the jets via a lease deal involving a new order from a third party, one of the people said.

The planes will replace four aging Boeing Co. 757s on some Aer Lingus flights to the U.S. as IAG renews the unit’s fleet amid increasing competition from carriers including Norwegian Air Shuttle ASA, which is establishing an Irish arm and aims to operate trans-Atlantic services using Boeing 737 Max jets.

IAG said on Nov. 4 that it had issued a request for proposals for the longer-range LR variant of the A321neo and planned to spend 400 million euros ($425 million) on switching to the model, which will complement the Airbus A330s that form the mainstay of Aer Lingus’s U.S. services.

The London-based group declined to comment further when contacted by Bloomberg on Tuesday. Airbus said it doesn’t disclose order discussions.

IAG is also in talks with American Airlines about incorporating Aer Lingus in the trans-Atlantic joint venture that BA operates with Spain’s Iberia, and may also bring it into the Oneworld global alliance. The company is separately planning a new low-cost unit serving North America from Barcelona and fed by traffic from its discount division Vueling. Chief Executive Officer Willie Walsh said last week that Aer Lingus’s poor brand recognition in the region probably rules it out as the operating company, leaving Iberia the most likely contender.

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