Airbus Makes a Comeback

A big order from US Airways bolsters the struggling European manufacturer.
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Updated from 7:24 a.m. EDT

The Paris Air Show kicked off with

Airbus

announcing orders for 339 jets from carriers around the world, including a 92-plane sale to

US Airways

(LCC)

, indicating that speculation about the European aircraft manufacturer's demise may have been exaggerated.

"There was a time when selling 339 aircraft was a good year," said Airbus spokesman Clay McConnell in Paris. "Now it's a pretty good day at the air show."

To an extent, Monday's events may mark a slowdown in the recent, rapid ascent of

Boeing

(BA) - Get Report

, which has taken advantage of a downturn in its rival's fortunes.

Last year, Boeing booked more orders than Airbus for the first time since 2000. Its new 787 Dreamliner has lured more advance orders than any aircraft in history. At the same time, Airbus has been plagued with problems, including cost overruns and delivery delays for the A380 and A350, as well as a meltdown at parent company European Aeronautic Defence & Space Company.

The US Airways order was the centerpiece of Airbus' big day. The fifth-biggest U.S. carrier ended months of speculation by reaffirming its order for the A350XWB, agreeing to take 22 of the airplanes starting in 2014. US Airways had previously committed to 20 aircraft, but a design change provided it with the option to reconsider.

US Airways becomes the only U.S. carrier so far to select the A350 instead of the 787 as its widebody plane of the future. Additionally, US Airways took 10 A330s, with deliveries starting in 2009. The planes will replace US Airways' 10 Boeing 767s.

On the narrowbody side, US Airways agreed to purchase 60 A320s between 2010 and 2013. The A320s will replace the carrier's 95 Boeing 737s, which will be retired by 2012. Within a few years, Boeing's representation in US Airways' fleet of 360 aircraft will be limited to 20 of its 757s.

"We've made a choice after 15 rounds -- Airbus by decision," the carrier said in an employee newsletter. "US Airways has selected its tried-and-true partner Airbus." US Airways currently operates the largest A320 fleet in the world.

The list price of the order is $10 billion, but the aircraft industry is well known as one where nobody pays list. In a recent interview, Airbus COO John Leahy noted that once, he almost sold an airplane for almost list price.

While Airbus clearly lags in the widebody U.S. market, McConnell said the US Airways narrowbody order reaffirms the continued viability of the A320, particularly for low-cost carriers.

Although

Southwest

(LUV) - Get Report

is "locked into the 737s because part of their business model is maintaining a single fleet type, the A320 family is the reference point for low-cost carriers," he said. Customers include

JetBlue

(JBLU) - Get Report

,

Frontier

(FRNT)

and privately held startup Skybus.

Airbus also disclosed orders from Qatar Airways for 83 aircraft and from

GE

(GE) - Get Report

leasing company GECAS for 60 planes. Additionally, Emirates Airlines, Jazeera Airlines, Kuwait-based leasing company Alafco, Russian airline S7,

Air France

(AKH)

and Tunisia's Nouvelair set plans to buy Airbus jets.

In a blog posted Sunday, Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, suggested that air shows can provide a forum to make a sudden burst of announcements.

"We don't save orders to score points in an artificial battle for the week," he wrote. "Other companies might have a different approach -- and maybe that works for them."

Nevertheless, Boeing on Monday announced orders from Jakarta-based Lion Air for 40 737-900s and from GECAS for six 777 freighters. A Boeing spokesman said to expect additional news later this week.