British Airways to Purchase 259 Airbus Planes Worth $11 Billion

Strategic Insights -

British Airways, the biggest European carrier, is expected to announce a historic contract with Airbus Industrie this week, marking its first significant break with Boeing and the largest order in Airbus' history. The purchase of up to 259 medium-range, single-aisle planes worth $11 billion is expected to revolutionize British Airways' routes, emphasizing point-to-point flights over traditional feeder aircraft. The move is a significant setback for Boeing, which had been its main supplier in recent years.

Key Takeaways:

  • British Airways is expected to order 59 Airbus A320 family planes, with options for up to 200 more, in a deal worth $11 billion.
  • The order will be the largest to Airbus by a European airline and marks a significant break with Boeing, which has been British Airways' main supplier in recent years.
  • The purchase reflects the rapid pace of deregulation in Europe and increased competition from no-frills airlines.
  • Airbus' aggressive pricing and political access in Europe are seen as key factors in winning the deal.
  • Boeing plans to announce a British Airways order for 16 777s and options to buy 16 more, worth about $5 billion, on the same day.
  • Aeriline industry analysts call the Airbus decision a defeat for Boeing in its effort to sell an updated version of its 737.
  • Airbus has made significant inroads into the market in recent years, but Boeing remains the leading supplier of commercial airplanes worldwide.

Statistics:

  • 259 medium-range, single-aisle planes worth $11 billion to be purchased by British Airways from Airbus Industrie.
  • 59 Airbus A320 family planes to be ordered initially, with options for up to 200 more.
  • $5 billion worth of Boeing 777s and options to be ordered by British Airways.
  • British Airways fleet comprises around 350 planes, with neither company confirming the reports of the purchase.
  • Total value of the announcements could reach $16 billion.
  • Airbus has made significant inroads into the market in recent years, but Boeing remains the leading supplier of commercial airplanes worldwide.

Sources:

  • Unnamed executives from British Airways and Boeing, as reported by The New York Times.
  • Raymond E. Neidl, analyst from Furman Selz, cited in The New York Times.
  • The New York Times.
  • Unnamed analysts, cited in The Wall Street Journal.