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Qantas splits jet order
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November 29, 2000: 6:05 a.m. ET
In blow to Boeing, Australian carrier's $4.6B order mostly for Airbus
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NEW YORK (CNNfn) - Qantas Airways Ltd., Australia's biggest airline and a long-time customer of Boeing Co., plans to spend $4.6 billion on 31 new planes – most of them from Boeing's rival Airbus Industrie of Europe.
Qantas said it will buy 12 of Airbus' planned A3XX superjumbo jets, another 13 Airbus aircraft and six Boeing upgraded 747-400s, the first orders for that Boeing model. Qantas says the total cost of the buy will be $4.6 billion over 10 years.
The A3XX orders give the European manufacturer 44 orders for the proposed 555-seat plane and help secure its plan to build the world's largest commercial airliner.
 The blow to archrival Boeing was softened by a Qantas order for six of its longer range 747-400s, the first order for the U.S. aircraft maker's proposed superjumbo jet family.
Boeing has said there is little market for a plane the size of the A3XX, but Alan Mulally, president of Boeing Commercial Airlines, conceded Wednesday the A3XX is a good fit for some airlines. "Some airlines will need airplanes bigger than the four-seven," the Associated Press quoted him as saying. "We wish them the best of luck with the A3XX."
Mulally said the Qantas order was not a setback. It shows a market trend toward bigger planes with better range, he said, and Boeing believes most of that demand will be in the range of the 520-passenger 747X Stretch, expected to be available in 2005, or its the new, long-range 777-200ER.
The 10-year fleet upgrade would be funded with cash, debt and equity, Qantas said. "The plan takes into account expected steady growth in key Qantas markets, plus replacement of several fleet types," Qantas chief executive James Strong said.
 Shares in the carrier, which is 25 percent owned by British Airways Plc fell 2.8 percent in a weak market Wednesday.
Morgan Stanley Dean Witter analyst Chin Lim, noting 19 of the 31 planes were due for delivery before 2006, said the only risk for Qantas would be a slide in profits before taxes due to increased domestic competition and a slowing Australian economy, Reuters reported.
The cosy domestic rivalry enjoyed by Qantas and Ansett Airlines has come under siege from two new entrants, including Richard Branson's start-up Virgin Blue.
Boeing (BA: Research, Estimates) stock closed up 12 cents Tuesday at $67.50. EADS NV (PEAD), which owns 80 percent of Airbus Industrie, was 1.9 percent higher at  24.10 in afternoon Paris trade Wednesday.
-- from staff and wire reports 
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Qantas Airways
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