|
BA deals blow to Boeing
|
 |
October 11, 1999: 7:33 a.m. ET
U.K. airline's order for Airbus aircraft leaves Boeing's 100-seater in the cold
|
LONDON (CNNfn) - British Airways Plc said Monday it was buying 12 Airbus Industrie A318 planes worth about $470 million, dealing a blow to Boeing's hopes of winning a foothold in the market for smaller, 100-seat jets.
The British carrier also took an option for 12 more A318s from Airbus, a consortium of European companies including France's Aérospatiale-Matra, British Aerospace and DaimlerChrysler Aerospace. The deal is the last step in the airline's strategy to overhaul its short-haul fleet.
The announcement surprised some industry analysts, who had expected British Airways to opt for the rival B717 jet offered by Boeing. "This is more significant as a negative for Boeing that a positive for Airbus," Brian O'Keefe, aerospace analyst at Commerzbank in London, told CNNfn.com.
British Airways only last week agreed to a deal under which Boeing would buy back 34 of the airline's B757 aircraft for conversion into freighters for DHL Worldwide, the package delivery company. The new A318s will replace some of these jets.
"The DHL deal last week was perceived as a sweetheart deal in the trade," said O'Keefe. "Generally speaking Boeing would have had everything to lose and to me it would have been astounding if they hadn't pulled out all the stops to win this order," he said.
Pricing apart, analysts noted Boeing's B717 would have been available soon while BA will have to wait for the A318s.
Boeing, the world's largest aircraft maker, has had trouble finding buyers for its smallest jet, which it inherited when it bought McDonnell Douglas Corp. in 1997. Since its launch, the B717 has not attracted orders from any major airlines that would make it financially viable for Boeing in the long run, analysts said.
"An order from an airline like British Airways would have launched the B717 properly," said O'Keefe. "This could well be the death-knell of the B717."
Airbus made a major breakthrough last year when British Airways ordered 59 larger aircraft from its A320 family. The A318, the smallest in that family, shares some features with bigger Airbus planes, which should help lower maintenance costs at the carrier and gave Airbus the advantage in the small-plane order, analysts said.
Airbus aircraft are also designed with similar cockpits, cutting down on pilot training costs and providing more flexibility for a carrier when scheduling flight crews.
The A318 order represents the latest blow for Boeing, which has long dominated the commercial aviation industry. This year the U.S. manufacturer lies a distant second to archrival Airbus in the number of orders won. Through the first nine months of the year, the European manufacturer has won 70 percent of total orders.
"This year Airbus has taken Boeing to the cleaners in terms of market share," one analyst told CNNfn.
|
|
|
|
|
 |
|
