European Aircraft Manufacture: Airbus and Boeing Compete to Win American Airlines Plane Order

European aircraft builder Airbus aims to win a large plane order from AMR Corp’s American Airlines by offering $6 billion in preferential financing to woo the American carrier away from rival Boeing , according to the Wall Street Journal.

Airbus wants to break Boeing’s monopoly at American Airlines and has assembled a team of lenders and leasing firms to help the European company win the deal, people familiar with the proposal told the newspaper.

Airbus’s offer has a catalog value of almost $23 billion, but that is being heavily discounted, the people told the paper.

The European plane maker is offering American, a unit of AMR Corp , 130 of the current-generation A320s and 130 of the more fuel-efficient A320neo, the new engine option slated to enter service in 2015, the newspaper said.

American Airlines, which currently operates an all Boeing fleet, might make a decision about its airplane order as soon as next Wednesday, the people familiar with the matter said.

Meanwhile, Boeing is offering 737-800s and 737-900 Extended Range planes, people familiar with the matter said. However, the price and financing terms were unclear, the paper said.

Boeing is also racing to develop a product strategy for its best-selling 737 model to compete with redesigns of the A320.

“Boeing does not discuss our ongoing talks or sales campaigns with our airline customers,” Boeing spokesman Jim Condelles told Reuters.

Official at American Airlines and Airbus could not immediately be reached for comment by Reuters outside regular U.S. business hours.

Qatar Airways Plans Order 60 Airbus Superjumbo Jets

Les Echos newspaper reported, Qatar Airways is in advanced negotiations to place a giant order for 60 airliners built by the European firm Airbus.

The order, which would be announced at the Le Bourget air show in June, would be for 50 A320 NEO aircraft, the re-engined version of the medium-range A320, and for 10 to 20 A380 superjumbo jets.

The airline would also place an additional 50 options to buy A320 NEO aircraft and options to buy an additional 10-20 A380 planes, the report said.

Until now, Qatar Airlines has ordered five of the superjumbo aircraft but has signalled that it intends to buy more.

Commercial Aviation History : Airbus Wins Record Order From IndiGo Airline India, Boosting Upgrade A320 jet Engines

Airbus SAS won the biggest order in commercial aviation history, worth $15 billion at list price, from Indian low-fare carrier IndiGo Airlines, a boost for the company’s decision to upgrade its A320 jet with new engines.

The preliminary agreement to buy 180 planes will include 150 of the modernized A320 aircraft, according to a statement late yesterday. Toulouse, France-based Airbus committed to the new variant in December after more than a year of studying the option and expects a firm order from IndiGo within two months.

Success in selling single-aisle jets is critical for Airbus and rival Boeing Co. as they derive most of their earnings from those planes. Airbus’s pledge to offer new engines on the A320 from 2016 has put pressure on Chicago-based Boeing to consider the future of its best-selling model, the 737.

“It’s a strong start,” said Richard Aboulafia, vice president of Fairfax, Virginia-based Teal Group. “Boeing will face more pressure to make a decision on its single-aisle future. The company’s faith in staying the course with its current 737 probably won’t be tenable for more than 6-12 months.”

Airbus dubbed its latest offering the Airbus NEO, which stands for new engine option. Boeing has said that it was capable of offering its 737 with new, more fuel efficient engines, though has held back so far from a commitment, saying it wasn’t sure the business stacked up.

Indian Growth

The new aircraft will help IndiGo boost operations in the world’s second-most populous country. The carrier, owned by InterGlobe Enterprises Ltd., had already ordered 100 Airbus single-aisle jets and operates 32. InterGlobe, headed by Managing Director Rahul Bhatia, also runs hotels, sells business jets and offers technology services.

“The fundamental demand for air travel is only going up,” said Aditya Ghosh, the president of IndiGo, in an interview with Bloomberg UTV. “The gap between capacity and demand is increasing and these planes will extend our order book beyond 2015, when the 100 planes we ordered earlier are delivered.”

India’s economic growth of 8.9 percent in the quarter ended Sept. 30 made it the world’s second-fastest-growing major economy. Prime Minister Manmohan Singh’s government is aiming to sustain more than 9 percent annual economic growth to improve the lives of 828 million people who live on less than $2 a day.

Domestic air travel may surge fourfold to 180 million passengers annually by 2020, Singh predicted last year.

“India is one of the key growth markets of the world for aviation, and we are betting on the winners in India,” Airbus Sales Chief John Leahy said in a telephone interview yesterday.

SpiceJet, Air India

The country will likely need 1,030 new commercial aircraft over 20 years, the plane maker said in March. SpiceJet Ltd., the New Delhi-based discount carrier, last year announced orders for 30 Boeing 737s and 30 Bombardier Inc. turboprop planes. Flag carrier Air India and Jet Airways (India) Ltd. have both ordered Boeing 787 Dreamliners.

The classic Airbus A320 had a list price of $81.4 million in 2010, and Airbus has said the upgraded version would cost $6 million more. The company will start delivering the new versions in early 2016 and predicted a market potential of as many as 4,000 aircraft over 15 years. IndiGo is the first client to commit to the new variant.

Firm Order Pending

Leahy said a firm order will be signed in about two months. IndiGo ordered some standard models because it needed aircraft before the new jets become available. Specific engines for the aircraft will be announced later, according to Airbus.

IndiGo has not yet decided how to finance the order, Ghosh said. “The order is still 5-6 years before kicking in and the company has time to decide on funding options.” he said.

The geared turbofan engine by United Technologies Corp.’s Pratt & Whitney unit and the Leap-X from CFM International, the venture of General Electric Co. and Safran SA of France, are the choices on the new A320. The current IndiGo fleet uses engines from International Aero Engines, a venture led by Pratt & Whitney and London-based Rolls-Royce Group Plc.

The A320 is a twin-engine model that seats about 125 to 185 people. When the company introduced the A320 in the 1980s, the jet included novelties such as fly-by-wire electronic handling, helping Airbus leapfrog Boeing Co. deliveries from 2003 onward.

Doug Runte, a managing director at Piper Jaffray & Co. in New York, said that while the IndiGo order is important for the new A320, the real test will be winning away a Boeing customer.

“IndiGo is a legacy A320 operator so it is not all that surprising that it would choose to stick with the A320 family,” he said today. “The real win for Airbus and for the ‘‘Neo’’ will come if and when they can wrest a legacy 737 customer from Boeing by virtue of their new product.”

Source : Bloomberg.com

United Airlines Places Orders For 25 Airbus A350s And 25 Boeing 787s

United Airlines announced on Tuesday that it has ordered 25 Airbus A350XWB aircraft and 25 Boeing 787 Dreamliner aircraft and has future purchase rights for an additional 50 of both types of aircraft.

These orders follow a six-month request for proposal process, resulting in agreements with both Airbus and Boeing that allow United to meet its financial and operational objectives.
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Britain Pledges £340 Mln to Airbus A350

Britain pledged 340 million pounds in loans to European planemaker Airbus to win work, in a move set to aggravate a trans-atlantic dispute over aerospace industry aid.

Britain agreed to the loan on Friday to make sure parts for Airbus’s planned A350 widebody passenger jet are built in Britain, but it is likely to face fierce opposition from the United States and Airbus’s arch rival Boeing. Read more