Airbus secures lion's share of $6bn lease deal

RUSSELL HOTTEN

Airbus Industrie, the European aircraft manufacturing consortium in which British Aerospace is a partner, has beaten its arch-rival Boeing to win the lion's share of a $6bn (pounds 4bn) contract for 56 aircraft.

The deal with International Lease Finance is one of the biggest placed with Airbus, and helps to ease the huge disappointment it felt after losing a $12.7bn Singapore Airlines order to Boeing in December.

Yesterday's announcement also includes an order for 120 aircraft engines, thought to be worth about $140m, shared by Rolls-Royce, Pratt and Whitney, and GE-CFM, the US-French joint venture.

Los Angeles-based ILF - which leases aircraft to scheduled airlines and charter operators - has placed a firm order for 38 Airbus aircraft, with options on a further eight, and becomes the first company to acquire the consortium's new wide-body A330-200 jet. The aircraft have a book value of about $3.6bn.

The Airbus orders from ILF also include 13 twin-engined A330-200s, and 12 of the four-engined A340-300s - the aircraft with the longest range in the world, about 9,300 miles. The deliveries to ILF are to begin in May 1997.

ILF is also buying 18 Boeing 777s, with a further two options, for about $2.8bn. Airbus has about 30 per cent of the world share of aircraft sales, against Boeing's 60 per cent.

Jean Pierson, managing director of Airbus, said: "With more than 70 Airbus Industrie aircraft leased and currently in service with some 30 operators throughout the world, ILF has helped us increase our market penetration even further."

Airbus said it is also talking to Tunisia's airline Tunis Air about providing replacements for its 11 Boeing 727s and 737s.

Rolls-Royce said yesterday that its order for Trent engines was worth about $175m. The company will supply two Trent 800 engines for each of four Boeing 777s and two Trent 700s for each of four Airbus A330-200 airliners.

GE Aircraft Engines and CFM International, which is jointly owned by GE and Snecma of France, said that its contract for 86 engines was worth about $1bn. Pratt and Whitney is supplying 11 engines in a deal worth $240m.

Meanwhile, Boeing today publishes its annual market forecast for the aircraft sector, predicting that the worst is over for the depressed sector. Nancy Bethel, vice president of marketing for Boeing, said: "Our industry appears to have made it through the bottom of the cycle."

Orders for new aircraft throughout the industry more than doubled in 1995 to 714, and it was the first time since 1990 that orders exceeded deliveries. The report said that the world's airlines are expected to buy 15,900 aircraft worth $1,100bn over the next 20 years. Two out of three of these aircraft will be delivered outside the United States.

The figures are based on Boeing projection for world economic growth of 3.2 per cent a year. Passenger traffic is expected to grow at 5.1 per cent a year throughout the world with travel in the Asia-Pacific region growing the fastest at 7.1 per cent. Air travel growth in China will average 11.5 per cent.