International Airlines Group (IAG) has placed a major order for Airbus A320s and A320NEOs that are to be operated by its three airline units British Airways (BA), Iberia and Vueling Airlines. The commitment comprises 62 firm orders and another 158 options, says IAG.

Of Vueling’s 62 firm orders, 32 are for the NEO and 30 for the current A320 version. All of the additional options are for the NEO.

The order is a clear sign of where IAG sees its growth in the short-haul markets. If all the options are exercised, more than half of the total order will be for low-fare unit Vueling, while BA and Iberia will have to share the rest. The two mainline carriers also have to replace large existing narrowbody fleets over time.

In recent long-haul orders, IAG has secured options for Iberia that are subject to the unit’s successful restructuring. “Vueling has managed to successfully expand its business profitably by targeting both growth markets and those areas where weak competitors are reducing capacity,” says IAG CEO Willie Walsh. “These new aircraft will enable Vueling to continue that expansion and replace some of its older fleet with modern, fuel efficient aircraft, leading to further unit cost reductions.”

According to Walsh, the aircraft on option allocated to BA and Iberia would replace the existing fleet.

The order is subject to shareholder approval, like earlier commitments for the Airbus A350 and the Boeing 787. The 62 single-aisle aircraft on firm order for Vueling are planned to be delivered between 2015 and 2020.

IAG took control of Vueling earlier this year to become reestablished in the European short-haul market, from which both BA and Iberia have pulled significant capacity in recent years owing to low-cost competition.

The Vueling fleet decision is another blow to Bombardier, which had hoped to place its new CSeries with the Spanish airline.