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Airbus seals $50-bn jet deal to outdo Boeing

The Indigo deal more than doubles Airbus's previous order book for the year, which stood at about 290 aircraft

Julie Johnsson Mary Schlangenstein & Benjamin Katz | Bloomberg 

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Airbus A320 neo. Photo: Shutterstock

SE announced the biggest commercial-plane transaction in its history, securing an order for single-aisle valued at nearly $50 billion at the Dubai Air Show, outdoing Boeing’s own $20 billion mega-deal.

Wednesday’s pact for 430 A320neo planes with US investor Partners marked a turnaround for at the Gulf expo, where it had been trailing its rival. It’s also a crowning achievement for sales chief John Leahy, who is set to retire after a career in which he has struck deals for more than 16,000 jets and lifted the European planemaker into a duopoly position with

For Partners, led by Bill Franke, the accord provides upgraded narrow-body to boost the fleets of low-cost carriers from Denver to Budapest. The planes will go to four in Indigo’s investment portfolio: Frontier Airlines, Mexico’s Volaris, East European operator and Chile’s JetSmart, which began operating this year.

The deal features 273 A320neo jets together with 157 of the larger A321neo variant and is worth $49.5 billion before customary discounts, said. Leahy, 67, called the transaction “remarkable,” while Franke, 80, who co-founded in 2002, said it underscores his confidence in the A320 and the bargain fares, no-frills travel model he helped develop.

shares rose as much as 4 per cent and were trading 2.9 per cent higher at €85.93 as of 11:13 am in Paris, taking the gain this year to 37 per cent.

recovered some ground with the sale of 175 737 Max planes, the A320’s main competitor, to FlyDubai, a deal big enough to have dominated most air shows.

While that order will come as an irritation for Airbus, with the airline having been expected to split it between the two manufacturers, the Toulouse, France-based company wasn’t done at the Dubai event. It went on to announce EgyptAir Airlines Co. as the operator of 15 A320neos previously ordered by leasing firm AerCap Holdings NV.

Airbus seals $50-bn jet deal to outdo Boeing

The deal more than doubles Airbus’s previous order book for the year, which stood at about 290 as of October 31, pushes the planemaker’s backlog above 7,000 jets and reverses expectations that orders will trail deliveries in 2017.

The haul will also help catch up to in the order tally this year, with the European planemaker having chalked up 343 contracts at the end of last month, compared with 690 for its Chicago-based rival as of November 7. The order also trumps a 2015 deal for 250 single-aisle jets worth $27 billion by Indian budget carrier The two aren’t related.

The massive A320 win takes the sting out of a possible defeat on the A380 superjumbo, which has so far failed to clinch a follow-up deal with local carrier Emirates at the Dubai show. The have been in talks on a deal for about 36 additional double-deckers valued at $15.7 billion, people familiar with the negotiations have said.

The A380 has become all but a fringe product for Airbus, with a total order book of 317 — more than 100 short of the A320s that plans to buy.

The breakdown of the order is as follows:
  • Wizz — 146 planes (72 A320neo, 74 A321neo)
  • Frontier — 134 planes (100 A320neo, 34 A321neo)
  • Volaris — 80 planes (46 A320neo, 34 A321neo)
  • JetSmart — 70 planes (56 A320neo, 14 A321neo)
Boeing’s 737 deal from FlyDubai includes more than 50 of the largest Max 10s, with the balance to be made up of Max 8s and 9s, according to a statement. The carrier, which is due to integrate more closely with Emirates over coming months, also has options on 50 more

Emirates itself snubbed on the first day of the show with a surprise $15 billion order for 787 wide-body jets, after also looking at the European company’s A350.

The purchase provides a boost to Chief Executive Officer Tom Enders, who has found himself on the defensive amid an investigation into bribery allegations at the company. Enders has warned employees that the probe is likely to be a drawn-out process that could result in “serious consequences” and “significant penalties.”

A German who has run for five years, Enders orchestrated another coup last month when he struck a deal with Bombardier Inc. to take a majority stake in the Canadian company’s C Series jet program. That will give access to advanced technology while throwing Bombardier a lifeline for its slow-selling
The A320 is Airbus’s best-selling product and the that put the company on the map when it was introduced in the late 1980s with cutting-edge technology such as fly-by-wire controls and a side-stick to steer the plane rather than Boeing’s central yoke.

was first to pioneer the new-engine variant of its existing single-body model. The A320neo first flew in 2014 and has been delivered to customers around the world. Boeing’s response, the 737 Max, only entered commercial service this year.

Narrow-body aircraft, which typically seat six abreast in economy class, are the workhorses of the global airline fleet. Burgeoning demand for air travel will push jetliner sales to more than 34,000 worldwide in the next 20 years, according to Airbus’s 2017 global market forecast. Almost three-quarters of that will be single-aisle models, the company said.

While a huge commercial hit, the A320neo hasn’t been without technical faults. Output is being disrupted by manufacturing delays at Pratt & Whitney, a unit of United Technologies Corp., which supplies the plane’s geared turbofan engine. The A320neo is also powered by engines made by CFM International, a venture between General Electric Co. and Safran SA.

makes the A320 family at different sites around the world, including its main factory in Toulouse, France, as well as in Hamburg, Germany. The company also builds the plane at an assembly line in China, and has recently pushed into the U.S. with a plant in Mobile, Alabama.

First Published: Thu, November 16 2017. 02:06 IST