Boeing Passed Over As BA Orders Airbus

LONDON -- British Airways PLC said Monday that it was buying 12 Airbus Industrie A318 planes and had options on another 12, snubbing Boeing Co., which had hoped to clinch the order for the 100-seater jets.

The list price of the 12 firm orders is pounds 285 million ($470 million), but industry sources said Europe's biggest airline was likely to have secured a substantial discount.

British Airways said the choice of Airbus reflected the aircraft's superior economics, flexibility and the fact that they would fit in with the rest of its short-haul fleet.

Analysts said one major advantage was the fact that the A318s shared the same cockpit layout as other narrow-bodied Airbuses, reducing the need for pilot training.

British Airways last year ordered 59 similar but larger aircraft - A319s and A320s - of which one has been delivered. The airline already had 10 A320s in operation before that order.

Boeing's 717 lacks this so-called "commonality" with other planes in the group's stable because it is a transformed MacDonnell Douglas MD95.

The A318s will be powered by Pratt & Whitney engines and delivered starting January 2003.

The decision is a blow not only for Boeing of the United States, which had been hoping to fill British Airways' 100-seater requirements with its 717 model, but also for the BMW Rolls-Royce joint venture that makes engines for the 717.

The British Airways deal adds to the substantial lead in new orders that Airbus has racked up over archrival Boeing this year.

At the end of September, the European consortium had secured 343 firm aircraft orders, more than double the 154 orders received by Boeing, and the Airbus order book totaled 1,424 airplanes, only 45 shy of Boeing's 1,469.

Although Boeing continues to outpace Airbus in deliveries of new planes, its lead is gradually eroding as Airbus gains ground in new orders.

British Airways chief executive Bob Ayling said the A318s, which will operate on both domestic and European routes, would in part replace Boeing 757s, which will be disposed of over the next three years.

The move to smaller A318s is part of the airline's strategy to modernize the fleet, increase yields and reduce capacity.

"Our new order of Airbus A318s completes the refinement of our fleet, a process which began in 1997 with changes to our long-haul aircraft," Ayling said.

"Our lower costs and modern aircraft like the A318 give British Airways the flexibility to emerge from current difficult market conditions in good shape."

Airbus Industrie said Friday that Libyan Arab Airlines intended to buy up to 24 new Airbus planes in a deal spurred by the lifting of sanctions on Tripoli in April.

For Airbus, the deal would be the first outright sale of planes to Libya. Industry experts said the deal could bring in more than $1.5 billion.

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