British Airways Considering Leasing Secondhand Planes to Cut Costs

Jan. 19, 2016
In an effort to keep costs lower and increase profits, the company has looked into the option of leasing.

As originally on The Wall Street Journal, British Airways is looking at the option to lease secondhand jetliners as opposed to adding new ones to their fleet. British Airways parent company International Consolidated Airlines Group (IAG) proposed the decision as a way to cut costs and expand long-haul fleets. British Airways had looked to purchase new double-decker aircrafts, but discovered that the cost to add to their fleet would be too expensive—so they’ve since looked to the used market.

Willie Walsh, IAG’s Chief Executive, said that the company is considering leasing used Airbus Group SE A380 superjumbos as well as Boeing Co. 777-300ER long-range jets. In the past British Airways has purchased new planes for their fleet, but the company has been focused on raising earnings outlooks and improving traffic since merging British Airways and Spanish carrier, Iberia.

Walsh announced that British Airways would receive around five or six A380s, while Iberia may also be given the chance to operate some of the aircrafts. The leased Airbus aircraft would be equipped with engines made by Rolls-Royce Holdings PLC, which are the same engines that are currently installed in British Airways’s existing A380s planes.

A possible source for A380 planes would be Malaysia Airlines, which is looking to decrease its fleet, citing that they have a surplus. There is also the potential consideration of leasing used Boeing 777 planes to British Airways fleet.

The potential plane rentals come after Delta Air Lines Inc. Chief Executive Richard Anderson last year said secondhand prices for some long-range jets had fallen sharply.