British Airways finalises $4.4bn deal for 24 Boeing super-jumbos

Click to follow
The Independent Online

British Airways has finalised a $4.4bn (2.2bn) order for 24 787s, the wildly successful wide-body jumbo jet developed by Boeing.

The order, which BA first announced in September as part of the renewal of its long-haul fleet, draws a line under the intense competition between the Seattle-based giant and Airbus, its European rival. The formalisation of the purchase brings the order book for the 787 to 790. With a price ranging from $146m to $200m, the aeroplane has generated orders with an estimated value of at least $110bn, given that major buyers are often given healthy discounts.

The success of the 787 the design of which is predicated on the idea that travel in the future will be done point-to-point over long distances rather than through the current hub and spoke system stands in contrast to the A380, the double-decker giant built by Airbus that has thus far received just 177 orders. That aeroplane, which has been hobbled by a two-year delay that caused massive losses at Airbus and its parent EADS, is a bet on the continued dominance of the system in which major hubs serve as the primary destinations for long-haul flights where customers then connect for shorter flights to their final destinations. As part of the original order in September, the BA chief executive Willie Walsh also ordered 12 A380s to replace its fleet of 747s. Most analysts agree, however, that Airbus's super-jumbo jet, capable of carrying up to 850 people, will never recuperate the billions that were sunk into its development.

Richard Aboulafia, an aviation analyst at the Teal Group, a research firm, said that the market has made its preference clear. While sales of twin-aisle planes, including the 787 and the 777, as well as Airbus's A330 and A350 XWB, have surpassed 2,500, the A380 has yet to breach the 200 barrier. "The market is speaking very loudly here," said Mr Aboulafia. "This is a niche machine that was poorly thought out from the word go."

Airbus's A350 XWB, its answer to the 787, has got off to a roaring start, though its success could further marginalise the A380.