British Airways Plc, Europe’s third- largest airline, placed an order worth as much as $1.6 billon for Boeing Co. planes over a rival model from Airbus SAS in the first stage of a plan to expand its fleet and replace older aircraft.
The airline chose four Boeing 777s over Airbus’s A330s and took options on four additional jets, the company said today in a statement. The first 777-200 ERs will be delivered in 2009, with the options available in 2010 as the carrier expands its fleet.
Boeing and Airbus will compete for a larger order for 34 replacement aircraft and an unspecified number of planes for expansion later this year, Robert Boyle, the airline’s commercial director, said on a conference call with journalists.
“The larger order is the key one,” said Chris Avery, an analyst with JP Morgan in London with a “neutral” rating on the stock. “Ultimately over 70 aircraft will have to be replaced over the next few years.”
The selection of Boeing in the first step of the competition “in no way suggests the outcome of the second order,” Boyle said. “This was a close decision but what tipped the balance was that it was easy to fit these aircraft in with our existing fleet.”
The airline has 43 Boeing 777 aircraft in its fleet, which fly to destinations in the Middle East, Africa, the Far East and the Americas. It plans to use the new long-haul planes for operations out of its new home at Terminal 5 in London’s Heathrow airport.
The second round of competition will pit Airbus’s A330, A350 and superjumbo A380 planes against Boeing’s 777, 747-8 and the 787 Dreamliner. The company plans to retire 20 older Boeing 747s and 14 Boeing 767s. Airbus’s offering of the A380 will top Boeing’s 747 as the world’s biggest passenger plane, seating 555 people to the 747’s 420 passengers, once it’s completed.
“For the first time at a fleet decision stage like this we’ve got very significant options available from both of the manufacturers,” Chief Executive Officer Willie Walsh said in an interview 7 February.“Just because we’ve operated an all Boeing long- haul fleet in the past doesn’t mean that we would necessarily do that into the future.”He said the A380 could make sense on long-haul routes such as Hong Kong to London, where there’s a lot of demand for flights and a narrow window for takeoff time due to different time zones.
“We’ve three aircraft leaving there within an hour so you can see straight away two A380s replacing three 747s on a route like that would make a lot of sense,” said Walsh. “There are a number of other destinations that we serve and have served that have similar characteristics.”British Airways today also exercised options for an additional four single-aisles Airbus A320s. The company currently has 66 Airbus planes, which fly short-haul European and domestic UK routes.