The A350 and Boeing 787 firm orders will be used to replace 30 Boeing 747-400 aircraft between 2017 and 2023 while the options can be used to replace aircraft or provide opportunities for growth.
For Iberia, IAG has also reached agreement with Airbus as well as Boeing to secure commercial terms and delivery slots that could lead to firm orders for A350s and/or Boeing 787s. Firm orders will only be made when Iberia is in a position to grow profitably, having restructured and reduced its cost base.
The A350 will be powered by Rolls-Royce Trent XWB engines. The order includes a comprehensive maintenance package with total care agreement.
Willie Walsh, IAG chief executive, said: "The A350-1000 will bring many benefits to our fleet. Its size and range will be an excellent fit for our existing network and, with lower unit costs, there is an opportunity to operate a new range of destinations profitably. This will not only bring greater flexibility to our network but also more choice for our customers.
"Both aircraft will provide further cost efficiencies and environmental benefits with fuel cost per seat improvements of more than 20 per cent.
"This order will also secure jobs in Britain and Spain. The A350's wings are made in Britain while its horizontal tail plane, horizontal tail plane boxes and lower wing covers are made in Spain. Rolls-Royce Trent XWB engines are assembled in Britain".