Wednesday, November 14, 2018

Airbus likely sold 10 A330neo jets to Delta

U.S. carrier Delta Air Lines has emerged as the probable buyer for 10 Airbus A330neo jets worth $3 billion, industry sources said, in a boost for the becalmed European model.

Airbus announced an order for 10 of the 300-seat aircraft in its latest monthly order update on Friday, but withheld the name of the buyer for the Oct. 30 deal.

Two industry sources, asking not to be named, said Delta was the buyer. A third said Delta had been looking to expand an existing order for 25 A330neo aircraft.

Airbus declined comment. Delta was not immediately available for comment.

If confirmed, the deal would mark the second order for the slow-selling A330neo in as many weeks after Kuwait Airways ordered eight of the long-haul planes in mid-October.

Airbus is aggressively seeking more orders for the latest version of its profitable A330 franchise after sales of the engine-upgraded A330neo model fell short of expectations in the face of heavy competition from the newer Boeing 787.

However, industry sources have questioned how far recent orders represent net new sales for the European giant, saying they could replace at least some earlier orders for the A350.

The new-generation A350 is a longer-term bet for Airbus and competes with the 787 and Boeing 777. But one market source said Airbus was willing to give up some orders for the newer plane in order to keep the A330neo afloat and prevent production cuts.

Airbus has given cautious signals that it is prepared to be flexible in both directions when offering combinations of the A330 and A350, sources said, though it cannot afford to lose too many orders or customers for the more strategic A350 plane.

The wide-body A330neo is part of a pair of upgraded aircraft - the other being the strong-selling A321neo narrow-body - that strategists say Airbus is trying to push into the market to reduce the space for a new 220-260 seat, mid-sized jet being studied by Boeing. A decision on that project is due next year.

Airbus is especially keen to continue A330-series production because it has been a major source of profits and cash.

Airbus also needs an aircraft like the 250-300 seat A330 to offer airlines a step-up into the wide-body market from its largest narrow-body, the A321neo, which holds up to 240 people.

Without it, Airbus's smallest wide-body would be the 315-seat A350-900, which leaves a large gap in Airbus's portfolio above the A321neo for rival Boeing to exploit.

(Tim Hepher and Tracy Rucinski - Reuters)

No comments: