Airbus Gets Year-End Boost With $60bn Order Rush

Airbus A320
Photo by DimaBerkut/iStock/Getty Images Plus/Getty Images

by Alan Tovey, The Telegraph, December 29, 2017

Airbus has ended the year with a near-$60bn (£44.5bn) rush of demand for its bestselling A320 airliner, announcing 100 new orders and confirming details of a massive sale revealed last month.

On Friday, China Aircraft Leasing Group Holdings agreed a deal to acquire 50 A320neo jets worth $5.4bn at list prices. 

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A day earlier, Toulouse-based Airbus said Dutch leasing company AerCap had ordered another 50 A320neos.

Also on Thursday, Airbus finalised a deal announced last month with no-frills airline owner Indigo Partners for a total of 430 of A320neos and its larger sister aircraft the A321neo. 

The pan-European plane-maker said the Indigo order - which will see jets go to budget carriers Wizz, Frontier, JetSMART and Volaris - was its largest deal ever, and was worth $49.5bn at list prices. 

However, the scale of all the orders means that the buyers are likely to be able to negotiate substantial discounts.

FTSE 250-listed Wizz Air, which operates flights from the UK to mostly central and eastern European destinations, confirmed that Airbus had granted it "significant discounts from list prices" for the 146 planes, which would be worth $17.2bn without the discounts.

Wizz Air said the agreement, which will need to go to its shareholders for approval, would "deliver on its fleet replacement and expansion plans". The planes will be delivered in stages until 2026.

The A320neo - a modernised version of the A320, equipped with more efficient engines - has proved a huge hit with customers. Airbus has so far taken orders for 5,800 of the aircraft, with the company claiming to have a 60pc market share, something strongly disputed by US rival Boeing, whose 737 airliner is a direct competitor. 

The A320 family and the neo versions of the jet have amassed total orders of 14,000 for Airbus, and the company is battling to meet demand for them. It has an almost 10-year order backlog and  is targeting an increase in the production rate to 60 per month by early 2019.

Wings for the A320 family are built at the Airbus plant in Broughton, North Wales, and the aircraft are assembled at plants in Toulouse, Hamburg, Tianjin in China and also Mobile, Alabama.

John Leahy, Airbus’s legendary head of sales and who is retiring to be replaced by Rolls-Royce civil aerospace chief Eric Schulz, called the latest sales “a great endorsement for our A320 family of aircraft”.

The rush of good news from Airbus came amid growing talk that its A380 superjumbo could be axed unless it agrees a new order from Emirates, the biggest operator of the double-decker airliner.

Airbus called reports of jet's potential demise "speculation" but the company has failed to land any orders for the A380 for two years and is slowing the production rate to just six a year.

The company had been expected to reveal at November's Dubai airshow that Emirates was buying 36 more A380s, adding to the 142 it has in service or on order.

However the deal was pulled at the last minute in a highly embarrassing move for Airbus, with some of the plane-maker's executives attending an Emirates press conference expecting to see the sale being announced, only for Gulf-based airline to say it was instead buying 40 of Boeing's 787s in a $15bn deal.

 

This article was written by Alan Tovey from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].

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