Boeing Co (NYSE:BA, ETR:BCO) will sell $10 billion worth of aircraft to the United Kingdom under a new trade agreement that also secures tariff exemptions for British-made Rolls-Royce engines and aircraft parts, US Commerce Secretary Howard Lutnick said on Thursday.
The order, expected to be announced later today, sent Boeing shares up 3.5% in early trading as investors welcomed the major transatlantic sale and its potential ripple effects across the aerospace sector.
The deal is likely to come from one of the UK’s two major long-haul carriers—British Airways or Virgin Atlantic—with industry sources pointing to IAG, the parent company of British Airways, as the probable buyer. In October 2023, frequent flyer website Head for Points reported that IAG had been in discussions with both Boeing and Airbus to replace its aging fleet of Boeing 777s.
The aircraft purchase is closely tied to a trade agreement between Washington and London that would allow UK-made Rolls-Royce engines and parts to be exported to the United States without being subject to tariffs—a move seen as mutually beneficial to both countries’ aerospace industries.