British Airways Pits Boeing Against Airbus in $10 Billion Competition

British Airways has invited Boeing and Airbus to compete in a bid to supply aircraft worth at least $10 billion, marking a significant shift in the airline's previous preference for Boeing. The competition, which is the first stage in a purchasing plan that could take nearly a decade to complete, will see the airline replace its older Boeing models with new aircraft. Initial responses from the manufacturers are expected by the end of the year, with orders placed next year.

Key Takeaways:

• British Airways has invited Boeing and Airbus to compete in a bid to supply aircraft worth at least $10 billion.
• The airline plans to replace 20 Boeing 747s and 14 Boeing 767s by about 2014, which will be 25 years old at the time.
• The airline is considering Airbus's A380 superjumbo and A350 XWB, as well as Boeing's 787 and "stretch" 747-800.
• The competition is the first stage in a purchasing plan that could take nearly a decade to complete.
• Initial responses from the manufacturers are expected by the end of the year, with orders placed next year.
• Willie Walsh, chief executive of BA, believes that the airline's timing is good, with a delivery timetable that falls several years after the peak of the manufacturers' existing commitments.

Statistics:

• The competition is worth at least $10 billion (Pounds 5.3 billion).
• British Airways plans to replace 34 aircraft by 2014.
• The airline expects initial responses from the manufacturers by the end of the year.
• Orders will be placed next year.
• The new aircraft will be delivered between 2014 and 2020.

Sources:

• The Times, 2006