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Airlines

British Airways Awards Airbus Major Contract, Orders 188 Jets

Strategic Insights

— 2 min read

British Airways, Europe's largest airline, has awarded a major contract to Airbus Industrie, ordering as many as 188 short-haul, single-aisle jets worth $8.5 billion. This order marks a significant departure from the airline's previous reliance on Boeing, with which it had a longstanding relationship. The contract includes an option to purchase additional planes, totaling 129 more, and will secure jobs for 38,000 people at factories of Rolls-Royce and British Aerospace. Despite this setback for Boeing, the airline has also announced plans to purchase 16 new Boeing 777-200 jets, with an option for 16 more, at a total list price of $4.8 billion.

Key Takeaways:

  • British Airways has awarded a major contract to Airbus Industrie, ordering as many as 188 short-haul, single-aisle jets worth $8.5 billion.
  • The order will secure jobs for 38,000 people at factories of Rolls-Royce and British Aerospace, one of the four partners in the Airbus group.
  • The airline has also announced plans to purchase 16 new Boeing 777-200 jets, with an option for 16 more, at a total list price of $4.8 billion.
  • British Airways will purchase 39 Airbus A319's, carrying as many as 126 passengers, and 20 A320's, with up to 156 passengers, initially.
  • The airline has options to order 129 more planes, including the A319 and A320 models.
  • By choosing Airbus and Rolls-Royce engines, British Airways ensures that much of the work will be done in Britain, including the construction of wings by British Aerospace.
  • British Airways' chief executive, Robert Ayling, insisted that the choice of Airbus had been made solely on the basis of cost, with the offer presented by Airbus and Rolls-Royce being a better value option.

Statistics:

  • The Airbus order is worth $8.5 billion and includes an option to purchase up to 259 firm orders and 129 more planes.
  • The contract will secure jobs for 38,000 people at factories of Rolls-Royce and British Aerospace.
  • The total list price of the 16 new Boeing 777-200 jets, with an option for 16 more, is $4.8 billion.
  • British Airways currently flies 18 777's equipped with General Electric engines.
  • The order includes 39 Airbus A319's, carrying as many as 126 passengers, and 20 A320's, with up to 156 passengers, initially.

Sources:

  • The New York Times (no date mentioned)
  • Reuters (no date mentioned)
  • Bloomberg (no date mentioned)
  • "British Airways Orders 188 Airbus Jets in Major Contract" (headline only) - The New York Times (no date mentioned)
  • "British Airways Chooses Airbus, Rolls-Royce for Short-Haul Planes" - Bloomberg (no date mentioned)

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