Bloomberg News

British Airways Gets First Boeing 787 With London Arrival Delay

June 26, 2013

British Airways said it has taken delivery of its first Boeing Co. (BA:US) 787 Dreamliner, with arrival in the U.K. pushed back for unspecified operational reasons, adding to delays following a global three-month ground of the jet.

“We expect our first two 787s to arrive at Heathrow within the next few days,” Tony Cane a spokesman for the carrier, said in an e-mailed response to questions.

The first two planes were due last month, before the grounding related to battery flaws set back their planned arrival to today and tomorrow. The deliveries are part of a 5 billion pound ($7.7 billion) fleet upgrade as British Airways replaces less fuel efficient planes with additional Boeing 777 long-haul jets and introduces the Airbus SAS A380 from July 4.

The airline, which is a unit of International Consolidated Airlines Group SA (IAG), plans to add 22 new planes before 2015. The carrier has not yet disclosed on what routes the Dreamliners initially will be used. BA has 24 Dreamliners on firm order.

IAG said today that six 787s are part of a collateral pool in the placement of a $927 million asset-back bond, along with two Boeing 777-300ER long-range jets and six Airbus SAS A320 short-haul planes due for delivery through next June.

The Class A certificates, worth $721.6 million, have an annual coupon of 4.625 percent, with Class B certificates, valued at $205.4 million, carrying a 5.625 percent coupon.

“This transaction marks a strategic milestone as we diversify our sources of funding,” Chief Financial Officer Enrique Dupuy said in a statement, adding it marks BA’s first use of enhanced equipment trust certificates.

BA will eventually operate all three Dreamliner variants after the airline ordered 12 of the largest 787-10s, which Boeing began selling last week. BA also plans to buy rival Airbus’s A350, with deliveries of the twin-engine planes from both manufacturers stretching until 2023.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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