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Business

United Airlines to buy 25 Airbus A350 planes in a $6 billion deal

Text by FRANCE 24

Latest update : 2009-12-08

UAL Corp.’s United Airlines is set to buy 25 Airbus A350 aircraft for $6 billion, FRANCE 24 learned on Tuesday. The US giant also reportedly placed an order with its rival Boeing for 25 of its 787 aircraft.

UAL Corp.’s United Airlines has placed a much-awaited order to buy 25 aircraft from European aerospace group EADS and another 25 from US aircraft manufacturer Boeing Co., FRANCE 24 learned on Tuesday.

Reporting from the southern French city of Toulouse, where EADS subsidiary, Airbus, is headquartered, FRANCE 24’s Chris Bockman said that Airbus would make about $6 billion out of the deal for the 25 A350 long-haul jetliners. The Chicago-based aviation company also placed a matching order with its rival Boeing for its 787 aircraft, according to industry sources.

 
‘A huge relief to Airbus’

The aviation company’s order, which was expected to be announced later on Tuesday, represents a major boost for Airbus, said Bockman.

“This deal comes as a huge relief to Airbus,” said Bockman. “This is probably their worst year in terms of sales in many years.”

Airplane manufacturers have been particularly hard hit by the global financial crisis, which has seen travel rates drop, particularly in developed markets such as the US. This in turn has driven down airline demand for new planes.

Airbus sold only 194 planes in the first 11 months of this year. The 14 aircraft it sold to Air New Zealand on the eve of the Dubai air show have yet to show up on their order book.

Likening the purchase of an aircraft to that of buying a car, Bockman explained that aircraft buyers typically provide a down payment of around 25 to 30% of the total price. “This will bring in a lot of money, money they need right now,” said Bockman.

The new A350 long-haul jetliner is expected to enter service in 2013, according to news reports.

United Airlines is the number three US airline by traffic. The US stalwart emerged from a bankruptcy-court reorganisation in 2006 to turn itself into a market leader in capacity reduction in a crisis-hit travel market.

Date created : 2009-12-08

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