Tariff agreement
BA-Boeing deal comes with sweetener for Rolls-Royce
A deal for new aircraft has emerged as an early winner for both sides in the trade agreement between the UK and the US.
International Airlines Group (IAG), owner of British Airways, has ordered 32 US-built Boeing 787-10 planes, said to be worth $10 billion, as part of a bigger deal that came with a sweetener for UK aero engine maker Rolls-Royce.
Under the terms of the trade agreement, it secures tariff exemptions for Rolls-Royce engines and aircraft parts sold to the US.
Rolls-Royce engines won’t be used in the Boeing deal, but they will be used in 21 Airbus aircraft that British Airways is also buying.
Russ Mould, investment director at AJ Bell, says: “It looks like a classic Trump move: tell Keir Starmer that the UK has to buy American and the country will get something in return.
“If there’s one clear benefit to IAG from Trump returning to the White House, it’s that his policies have helped to drive down the oil price amid fears of a slowdown to global economic growth as result of tariffs. That slashes big bucks off IAG’s fuel bill.”
The news came as IAG recorded a near-tripling of first-quarter operating profits, way ahead of City expectations. It is on course, with the bumper summer season ahead, to hit profits of €4.6 billion for the year as a whole.
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Where’s the deal for Rolls Royce in this article. No engines to Boeing – which might have incurred a tariff – but engines being used in Airbus products which, presumably, wouldn’t have been subject to Trump tariffs anyway?
The BA Being deal to buy 32 Boeing aircraft should come with RR engines. This is no deal for the UK. This is a completely giving into Trump, also the RR engines for the Airbus fleet is a given. What does the UK get out of the BA-Boeing deal absolutely nothing for the UK. No backbone to this Government. The BA-Boeing deal should come with mandatory RR engines.
Why ? BA/IAG are private companies and are free of government influence.Choice of engines would be down to a combination of environmental, maintenance agreements and price.
This announcement of new aircraft has nothing to do with Trump or Starmer. IAG would have been negotiating this for several months and indeed it was well known for at least 6 months that IAG/BA were reviewing options for new long haul aircraft. Also, IAG generally only makes announcements like this when they do their financial reporting. The timing was just coincidental to this UK/US “trade agreement”, as the IAG report was set for this date long ago. The dates are publicly known and available on the IAG website.