Airbus beats Boeing in British Airways plane deal | Business| Economy and finance news from a German perspective | DW | 23.04.2013
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Business

Airbus beats Boeing in British Airways plane deal

European planemaker Airbus has landed a major deal with British Airways (BA) estimated to be worth about $12 billion (9.1 billion euros). The planes are meant to expand BA operations amid fierce competition.

A Memorandum of Understanding had been signed with Airbus to buy 18 A350-1000 aircraft with an option to purchase 18 more planes, British Airbus parent company International Airlines Group (IAG) announced late on Monday.

According to Airbus' website, each of the 36 long-haul passenger planes had a catalogue price of $332.1 million (254 million euros), making the deal worth a total of about $12 billion. However, bulk orders of this size usually entail a significant discount for the airline.

The purchase was part of BA's long-haul aircraft fleet renewal, IAG airline group, which also owns Spanish carrier Iberia, said in a statement. It added that the options for the 18 planes would lead to firm orders only when Iberia was making profits again after restructuring aimed at cutting costs at the struggling Spanish airline.

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However, the new planes would bring many benefits, said IAG Chief Executive Willie Walsh, as their range and size would be an excellent fit for the groups existing network.

"With lower unit costs, there is an opportunity to operate a new range of destinations profitably," Walsh added.

Last year, IAG posted a huge net loss of 943 million euros as a result of financial strains at Iberia and soaring fuel costs. Due to lower passenger numbers, worsened by Spain's economic crisis, Iberia is cutting more than 3,800 jobs this year.

uhe/ccp (AFP, Reuters)

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