Airbus beats Boeing to win pounds 6.9bn BA short-haul order
Tuesday 25 August 1998
The order, of up to 200 short-haul aircraft, is a major coup for Airbus, marking the first time the four-nation consortium has won a commission from the UK's biggest airline.
It is also a major blow for Boeing, which until today had been the dominant supplier to BA.
Sources close to the deal said in Paris yesterday that BA was set to lodge an initial order for up to 59 aircraft, worth more than pounds 600m, with options to buy as many as 200. The planes will be used on BA's European short-haul routes from Manchester and Birmingham. The sources said that the contract could be worth up to $11bn (pounds 6.9bn) if all the options were exercised.
The deal will be announced today at Airbus' headquarters in Toulouse, attended by Tony Blair, Prime Minister, who is on holiday near by. He is expected to welcome the deal as a boost for the UK and European defence industry.
BA is understood to have chosen a fleet Airbus A320s over the latest version of Boeing's 737, the biggest-selling airliner, to replace its European short-haul fleet. Airbus - by British Aerospace, France's Aerospatiale, Germany's Dasa and Casa of Spain - and Boeing have been fighting a fierce war over the order since February when BA first announced the competition.
Although the airline invited the two firms to come up with innovative financing ideas to lessen the cost of buying the planes, sources close to the company said that solutions such as leasing were not part of the deal.
Engines for the BA's new A320s are expected to come from the International Air Engines Consortium, which includes Rolls-Royce, and is offering a model known as V2500 - or an alliance of General Electric of the US and Snecma of France, which makes the CFM56.
Airbus is likely to hail its victory in the race to replace BA's European fleet as proof that it is eating into its US arch-rival's market share.
According to recent figures, Boeing is still the leader in the global market for civilian aircraft, but Airbus is catching up fast. Last year Airbus won 45 per cent of new orders, compared with around 30 per cent in recent times.
Separately, speculation was mounting yesterday that Boeing was set to win a BA order for a number of Boeing 777 long-haul aircraft at the expense of existing orders for 747s.
Industry sources said that BA was preparing to cancel the remaining orders for the big 400-seat jumbo seats and switch instead to the smaller 777s, which seats around 300 passengers. BA already operates 18 Boeing 777s and has a further 11 on order.
The sources said that BA's decision to overhaul its fleet was driven by the need to maximise yield (or profit) per passenger and avoid leaving empty seats on planes.
The move follows the lifting of strict regulations on a number of routes, including trips to the US, which will enable airlines to run more frequent flights.
British Aerospace shares rose by 15p to 420p. British Airways were up by 8.5p to 496.5p.
- 1 Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
- 2 Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
- 3 Disney heiress Abigail disowns her share of family profits in West Bank company
- 4 The secret report that helps Israel hide facts
- 5 Israel's propaganda machine is finally starting to misfire
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Disney heiress Abigail disowns her share of family profits in West Bank company
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...