Airbus Secures Large A350 Sale To US Airways, Hopes To Build Momentum

Includes: AAL, BA
by: Jonathan Liss

Airbus has secured a deal to sell as many as 30 revamped A350 aircraft (pictured) to US Airways Group, in a move the company hopes will allow it to make in-roads against market leader Boeing's 787 Dreamliner model. airbus 350 It is believed Airbus offered US Airways strong incentives to accept the deal, which is worth $7 billion at list prices; the WSJ, which broke the story, quotes individuals in the know, who claim the agreement includes an offer to renegotiate existing orders for other models, possibly saving hundreds of millions of dollars for the struggling airline. Airbus has had to redesign the twin-aisle, twin-engine, mid-size, long-haul airliner three times since 2005 amid criticism; US Airways was one of the highest profile airlines to back out of buying the A350 originally and Airbus is hoping its ability to retain the company will translate into other orders. Airbus COO John Leahy believes "this will be the year of the 350.” Leahy expects at least 200 orders for the A350 this year, with as many as half coming at this week's Paris Air Show. The US Airways deal means its well on its way there.

Sources: Wall Street Journal, The New York Times, MarketWatch, Reuters
Commentary: Spirit AeroSystems Looks at Airbus Plants -- PaperAeroflot Books Order for 22 Boeing DreamlinersBoeing One-Ups Airbus Yet Again With FedEx Contract
Stocks/ETFs to watch: US Airways Group (LCC), EADS NV (Airbus) [public EPA:EAD). Competitors: Boeing (NYSE:BA), Embraer-Empresa Brasileir de Aero (NYSE:ERJ). ETFs: iShares Dow Jones US Aerospace & Defense (BATS:ITA), PowerShares Aerospace & Defense (NYSE:PPA)
Conference call transcripts: Boeing Q1 2007 Earnings Call Transcript
Related: Airbus Aircraft Families - A350 Family

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