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Lufthansa is giving Boeing a shot at new wide-body deal
[FRANKFURT] Deutsche Lufthansa AG is giving Boeing Co a shot at scooping its next wide-body order with 787 Dreamliners, presenting a challenge to Airbus SE's effort to sell the German carrier more A350 jets, according to people familiar with the plans.
Lufthansa has requested proposals from both Airbus and Boeing, and is looking to order about 20 jets in a deal that may be finalized in the next few months, said the people, who asked not to be identified as the discussions are private. The airline is also asking the planemakers to include a way to get rid of its aging and fuel-hungry A340 models in any deal, which could be valued at about $5 billion, the people said.
Representatives of Lufthansa, Airbus and Boeing declined to comment.
The purchase of wide-body aircraft can define a carrier's strategy for decades, as they have a lifespan of 20 years or more and resale values vary widely. They are also a major investment for both airlines and manufacturers, with the latter needing large orders to help the multibillion dollar programs turn a profit.
Lufthansa has already ordered 25 A350s, 12 of which it will have in operation in Munich by year-end, and holds options for 30 more. While it has vowed to reduce fleet complexity, five years ago the carrier ordered 34 Boeing 777-9 jets, with the first one due to arrive in 2020. Those would be on top of any potential order for the smaller 787s.
The Boeing 777-9 deal has come under internal scrutiny, and Lufthansa has said it is considering stretching out deliveries, concerned about the cost and size of what will be the industry's largest-ever twin-engine jetliner. The accord includes 14 jets that Lufthansa can opt out of taking, possibly softening Boeing's already limited order book for the model.
Lufthansa is paying the price for investing too little in its fleet for two decades. The carrier's 728 aircraft were, on average, 11.4 years old last year, twice the 5.7 years of Dubai-based Emirates, the world's largest long-haul carrier. Lufthansa's almost 100 four-engine gas guzzlers produce the highest fuel bill of any airline in Europe, and its 50 A340s, almost a fifth of the models still in operation worldwide, are increasingly a liability with oil prices near the highest in about four years.