Thu, Nov 16, 2017 page10

• Airbus secures record US$50bn order

  GRACEFUL LANDING: The 430-aircraft deal more than doubles the firm’s order book for this year and reverses forecasts that orders would trail deliveries for the year

  • Bloomberg
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  Airbus SE announced the biggest commercial airplane deal in its history, securing an order valued at nearly US$50 billion for 430 airplanes from its single-aisle A320neo line.

  The pact with US investor Indigo Partners LLC gave Airbus the upper hand at the Dubai Airshow, where it had been trailing Boeing Co in orders.

  It was also a crowning achievement for Airbus sales chief John Leahy, who is set to retire after a multi-decade career in which he has struck deals for thousands of jets and lifted the European planemaker into a duopoly position with its rival.

  

  People watch as the United Arab Emirates Air Force’s al-Fursan aerobatics demonstration team performs at the Dubai Airshow on Tuesday.

  Photo: AFP

  For Indigo Partners, led by Bill Franke, the Airbus accord provides upgraded narrow-body aircraft to boost the fleets of low-cost carriers from Denver, Colorado, to Budapest.

  The airplanes are to go to four companies in Indigo’s investment portfolio: Frontier Airlines, Mexico’s Volaris, European operator Wizz Air Holdings PLC and upstart JetSmart, which began operating this year in Chile.

  The deal features 273 A320neo jets together with 157 of the larger A321neo variant and is worth US$49.5 billion before customary discounts, Airbus said.

  Leahy, 67, called the transaction “remarkable,” while Franke, 80, who cofounded Indigo in 2002, said it underscores his confidence in the A320 and the bargain fares, no-frills travel model he helped develop.

  Airbus shares rose as much as 3.9 percent and were trading 3.7 percent higher at 86.67 euros as of 9:06am in Paris, taking the gain this year to 38 percent.

  Even with the massive haul from Indigo, Airbus might not be done at the Dubai event.

  Other orders might still materialize, people familiar with the matter have said, including an accord with EgyptAir Airlines Co for A320neos and one with discount carrier flydubai.

  The latter is weighing an order for as many as 175 narrow-body airplanes that could be split between the A321neo and Boeing’s 737 Max.

  The Indigo deal more than doubles Airbus’ previous order book for the year, which stood at about 290 aircraft as of Oct. 31, pushes the planemaker’s backlog to more than 7,000 jets and reverses expectations that orders would trail deliveries this year.

  The haul will also help Airbus catch up to Boeing 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 Nov. 7.

  The order also trumps a 2015 deal for 250 single-aisle jets worth US$27 billion by Indian budget carrier IndiGo, which is not related to the US investment firm.

  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 trade show.

  The companies have been in talks on a deal for about 36 additional double-deckers valued at US$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 Indigo plans to buy.

  The purchase provides a boost to Airbus CEO 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.”
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