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News > International
Virgin buys $3.8B jumbos
December 15, 2000: 8:51 a.m. ET

U.K. airline's purchase of A3XX hands Airbus its 50th order for superjumbo
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LONDON (CNNfn) - Virgin Atlantic Airways gave plane maker Airbus Industrie a lift in its tussle with Boeing Co. by buying six superjumbos from the European firm as part of a $3.8 billion order.

Richard Branson's airline became the latest carrier to place a firm order to buy the A3XX, Airbus's planned double-deck airliner designed to carry up to 555 passengers. Virgin also has an option for another six superjumbos.

graphicThe order brings to 50 the number of A3XX planes now on order for airlines around the world. That was the number Airbus had said it would try to generate before finally deciding to proceed with the development of the largest-ever commercial airliner.

Sources close to the deal told CNNfn.com that the Airbus board will meet on Tuesday to approve a decision to put the plane into production.

"We are extremely honored that Virgin Atlantic has decided to become the British launch customer for the A3XX," Airbus chief executive Noel Forgeard said. "With 50 orders and many more options from quality customers around the world, Airbus is now in a strong position to launch production of the A3XX."

Airbus currently does not make a jetliner large enough to compete with Boeing's 416-seat 747-400, and sees the A3XX as its main weapon in the fight to break Boeing's 30-year dominance in the industry. The 747 has long had the market for very large commercial jets to itself.

The A3XX is expected to cost $12 billion to develop, and has stirred debate in the airline industry over whether such a huge plane is viable.

Boeing (BA: Research, Estimates) has been aggressively marketing a rival and bigger version of the 747 but has argued there isn't a market for a plane the size of the A3XX.

Boeing believes more airlines will demand planes of the size of its 520-passenger 747X Stretch, expected to be available in 2005, or its the new, long-range 777-200ER.

Airbus' first planned superjumbo model, the A3XX-100, will seat 555 passengers, but the European company said the largest A3XX model would be able to carry up to 650 passengers.

Toulouse, France-based Airbus foresees a market for 1,200 aircraft with more than 400 seats over the next 15 years, while Boeing estimates demand at just a third of that.

Virgin boss Branson said the airline is considering a number of options for the aircraft, including facilities such as a leisure area, gym, play area for children, duty free shops, showers, business center and private cabins for business-class passengers.

graphic"This is a fantastic plane made for the 21ST century, it's 20 percent cheaper to operate on a per seat basis compared to the 30 year-old Boeing," Branson told CNNfn.com. "Initially I would expect these giants of the skies to operate to the U.S. and the Far East."

Virgin Atlantic currently flies to 20 destinations with a fleet of 32 aircraft. The carrier has 10 long-range Airbus 340-600s on order, with options for another eight, due to enter service from 2002.

Closely held Virgin, in which Singapore Airlines Ltd. Has a 49 percent stake, also signed an agreement last month with Boeing for five new 747-400 aircraft in a deal worth more than $800 million.

Launch customers so far for the A3XX orders tally to date include Dubai's Emirates Airline, which has placed an order for five A3XX's and taken options on another five; Air France SA (FPAF), which has ordered 10 A3XX's, and leasing company International Lease Finance Corp., a unit of American International Group (AIG: Research, Estimates), which ordered five.

Last month, Qantas said it will buy 12 A3XXs, while its competitor Singapore Airlines plans to purchase 10 and took options for another 15.

Airbus is 80 percent-owned by European Aeronautic, Defense and Space Co. (PEAD), Europe's largest aerospace company, formed by the three-way merger of A駻ospatiale-Matra, the Dasa aerospace unit of automaker DaimlerChrysler AG, and Spain's Construcciones Aeronauticas SA, or Casa. BAE Systems PLC (BA-) owns 20 percent graphic

  RELATED STORIES

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: テつゥ 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices テつゥ S&P Dow Jones Indices LLC 2018 and/or its affiliates.