The Boeing-IAG Jet Deal: A Critical Test for Both Companies in 2025 and Beyond

The reported order of approximately 30 Boeing 787 Dreamliners by International Airlines Group (IAG), the parent company of British Airways, marks a pivotal moment for both the airline and Boeing. Valued at roughly $15.5 billion at list prices (though actual negotiated terms are typically lower), the deal underscores IAG’s ambition to modernize its fleet and expand post-pandemic operations. However, Boeing’s ability to deliver these jets on schedule—amid ongoing production challenges—will determine whether the deal becomes a win-win or a source of frustration for investors.

The Deal’s Strategic Rationale: IAG’s Play for Growth and Sustainability

IAG’s order of the 787-9, a fuel-efficient, long-range aircraft, is a strategic move to replace older widebody jets, reduce emissions, and capitalize on rising demand for transoceanic travel. The Dreamliner’s efficiency is critical for routes like London to Kuala Lumpur (resuming in April 2025) and Madrid to Rio de Janeiro, where its range and payload capacity enable nonstop services. IAG also plans to expand North American and Asia-Pacific routes, leveraging the 787’s flexibility to handle both cargo and passengers. By 2025, IAG aims to operate over 600 weekly widebody flights from London alone, with the 787 as a cornerstone of its fleet.

For Boeing, the order is a vote of confidence in its flagship narrow-body successor. The 787 program has faced years of setbacks, including supply chain bottlenecks, Rolls-Royce engine certification delays, and labor strikes. Deliveries hit just 51 jets in 2024, far below its 2019 peak of 14 per month. Boeing’s goal to ramp production to 7–8 per month by late 2024—and deliver 75–80 jets in 2025—will test its ability to recover.

The Delivery Timeline: Challenges and Risks

Boeing’s path to meeting its targets is fraught with obstacles. Key issues include:
- Supply Chain Constraints: Component shortages, particularly seating systems and engine parts, have plagued production.
- Engine Delays: Rolls-Royce’s Trent 1000 and GE’s GEnx engines face certification hurdles. The Kuala Lumpur route’s five-year hiatus stemmed from prior Rolls-Royce reliability issues.
- Labor Strikes: Ongoing U.S. strikes at Boeing’s facilities have stalled progress, forcing airlines like United and Air India to delay route launches.

These challenges could push delivery timelines into 2026, risking IAG’s ability to fully execute its 2025 expansion. For instance, IAG’s planned increases in frequencies to Doha (to 12 weekly flights) and Tokyo-Haneda (14 weekly) depend on timely deliveries.

Investment Implications: Riding the Jet Stream or Facing Turbulence?

Boeing’s stock has underperformed Airbus in recent years, reflecting investor skepticism over its execution. A successful 2025 delivery ramp-up could restore confidence, particularly if the 787 backlog is cleared. Conversely, further delays could pressure Boeing’s margins and reputation, especially as Airbus’s A350 competes directly for long-haul market share.

For IAG, the stakes are equally high. Its share price has risen steadily since 2021 as travel demand rebounded, but delayed 787 deliveries could force route cuts or capacity constraints. Airlines like Emirates and Turkish Airlines, also awaiting 787s, face similar risks, intensifying competition for limited aircraft.

Conclusion: Deliver or Decline

The IAG-Boeing deal hinges on production execution. If Boeing meets its 2025 target of 75–80 deliveries—up 47% from 2024—IAG’s 30 jets could be delivered by late 2025, enabling its route expansions. This would boost IAG’s revenue growth and sustainability goals while providing Boeing a critical revenue stream to stabilize its balance sheet.

However, the risks are material. Analysts estimate Boeing’s global aircraft backlog exceeds 1,000 jets, with over 100 787s awaiting delivery. Even a 5% delay in 2025 could postpone IAG’s Kuala Lumpur service beyond 2025, eroding its competitive edge against rivals like Emirates (stymied by 777X delays).

Investors should monitor Boeing’s production metrics—particularly monthly Dreamliner output—and IAG’s capacity utilization. A successful 2025 delivery cycle could lift Boeing’s stock and position IAG as a leader in premium long-haul travel. But if delays persist, both companies face a bumpy ride ahead.

The skies over aviation’s comeback depend on it.