Photograph: A logo of Airbus is pictured on their booth during the European Business Aviation Convention & Exhibition (EBACE) in Geneva, Switzerland, May 22, 2017. REUTERS/Denis Balibouse
Airbus has announced it is to sell 430 models of its A320neo aircraft in a deal worth £38bn.
Dubai (The Guardian) – Order signed at Dubai airshow offers huge boost to Airbus, which has lagged behind rival Boeing in deals this year
Airbus has landed the aerospace industry’s biggest-ever deal by number of planes, with an agreement to sell 430 jets worth up to $50bn (£38bn) to budget airlines.
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The preliminary deal for A320neo narrowbody jets was signed at the Dubai airshow on Wednesday and offers a major boost to Airbus, which has lagged its rival Boeing in deals this year.
But Boeing immediately hit back with a provisional agreement to sell 175 planes to the budget airline flydubai. Including options to buy a further 50 planes, that deal could be worth $27bn at list prices.
The deal between Airbus and US budget airline investor Bill Franke’s Indigo Partners is the industry’s largest ever by number of aircraft.
Indigo plans to supply the A320neo narrowbody jets to four airlines in which it has stakes: US carrier Frontier Airlines, Mexico’s Volaris, Chilean carrier JetSmart and Hungary’s Wizz Air.
Airbus said it expected to finalize the transaction with the 80-year-old Franke in the coming weeks. Its shares were up by 2.5% to €85.59 at midday on Wednesday.
The agreement, along with flydubai’s deal for Boeing’s 737 Max narrowbody jets, underscores how budget carriers are rewriting the industry rulebook by combining bargain fares with optional services and upgrades for which passengers pay extra.
According to some delegates at the air show, the deals also suggest airlines are taking advantage of a recent slowdown in demand for new jets to negotiate competitive prices.
This year Airbus’s share of the global plane order market had dropped to 35% prior to the Dubai show, as a rejuvenated Boeing management made advances in Singapore and elsewhere.
Airbus management is also dealing with investigations by British, French and US authorities after the company uncovered inaccuracies in sales documents.
Airbus aims to sell more of its A380 superjumbo, with main customer Emirates seeking guarantees on keeping production lines open.
