IAG has reached agreement with Airbus to make firm orders for 18 Airbus A350-1000 aircraft for British Airways and take options for a further 18.

This deal follows the recent announcement of the planned conversion of 18 options for Boeing 787 aircraft into firm orders.

Taken together these firm orders, which are subject to the approval of IAG shareholders, will allow BA to replace 30 of the existing 747 fleet between 2017 and 2023, while the options can be used to replace aircraft or provide opportunities for growth.

Both the A350s and 787s will be powered by Rolls-Royce engines, and a comprehensive maintenance package is included in the engine deal.

Keith Williams, BA chief executive, said: “The A350 is a new type, which will bring many benefits to our fleet. Its size and range will be a good fit for our existing network. Like the 787, it has fuel costs per seat more than 20 per cent lower than the 747s, so there will be opportunities to operate a new range of destinations profitably.

“These orders demonstrate confidence in British Airways’ future, and reinforce our commitment to offer the best possible network and flying experience for our customers.

“The orders emphasise the vital nature of achieving the objectives of the airline’s current business plan, and in particular generating an annual profit of £1.1bn by 2015. Profit is essential to fund investment – and airlines make no bigger investment than in new aircraft.”

Keith continued: “The renewal of our long-haul fleet begins with the arrival of our first A380s and 787s in the next few months. With today’s important announcement, we have a great opportunity to see further investment come to fruition throughout the next ten years.”