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Airbus seeks more orders for new A321XLR plane after Boeing's IAG coup

Le Bourget

AIRBUS, reeling from the potential loss of a major customer for its bestselling A320neo after British Airways owner IAG placed a lifeline order for Boeing's grounded 737 MAX, prepared to hit back on Wednesday with more orders for its new A321XLR.

The European planemaker has been negotiating with US investor Bill Franke whose Indigo Partners has been known to place orders for multiple airlines within its portfolio and could close a deal at the Paris Air Show, industry sources said.

Airbus declined to comment.

After intense scrutiny over safety and its public image, Boeing won a vote of confidence on Tuesday as IAG signed a letter of intent to buy 200 of its 737 MAX jets that have been grounded since March after two deadly crashes.

The surprise order lifted the energy of a previously subdued air show, where the talk had been of the possible end of the aerospace cycle, given the challenges at Boeing and Airbus as well as geopolitical and trade tensions around the world.

It was not immediately clear how many of the 200 aircraft would wind up as firm orders and how many would be options, nor how it would affect Airbus's presence at IAG, which placed an order for 14 A321XLR hours before the announcement.

"It's a great coup, but for now it's a communications coup as it's a letter of intent. We will see what kind of deal lies behind it," a European industry source said.

Even so, Boeing was expected to try to capitalise quickly on the move and seek further support for the embattled MAX as it offers airlines other big packages at attractive prices.

Australia's Qantas Airways said on Wednesday that it would order 10 Airbus A321XLR jets and convert a further 26 from existing orders already on the planemaker's books.

Airbus is also in talks with leasing company GECAS and has been trying to secure eye-catching orders for the A321XLR from JetBlue and American Airlines, though the world's largest carrier does not typically announce deals at air shows.

Airbus sales chief Christian Scherer said there was some softness in the market but did not see an increase in cancellations. He told investors he expected to win more orders for the smaller A220, formerly known as CSeries.

Both Airbus and Boeing are cushioned by thousands of orders for the single-aisle jets.

Airbus chief executive Guillaume Faury predicted a pickup in orders after a slow start to 2019. He voiced concerns about trade tensions and the growing risk of a no-deal Brexit.

US President Donald Trump said on Tuesday he would restart trade talks with China, raising the possibility of detente in a costly trade war that has pressured financial markets and provided a tense backdrop to the June 17-23 air show.

However, in the Middle East, tensions between the United States and Iran were heightened after attacks last week on two oil tankers near the strategic Strait of Hormuz shipping lane which Washington has blamed on Tehran. REUTERS