Airbus seen close to BA deal, adding pressure for Boeing revamp

Sun Apr 7, 2013 6:04pm EDT
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By Tim Hepher

PARIS (Reuters) - A potential $7 billion order from British Airways for Airbus A350 jets is set to hand Boeing Co (BA.N: Quote) its next major challenge as it nears the end of a three-month crisis over the grounding of the 787 Dreamliner, analysts said.

If confirmed, the order would strike a blow inside one of Boeing's most loyal wide-body customers and may hike pressure on the U.S. planemaker to defend future profits by formally offering a revamped version of its successful 777 mini-jumbo.

Industry sources said on Sunday that International Airlines Group (ICAG.L: Quote), which owns both BA and Spain's Iberia, appeared close to ordering approximately 20 Airbus EAD.PA A350-1000 aircraft worth $332 million apiece at list prices.

However, the negotiations - first reported by The Wall Street Journal - are expected to continue until the last minute for what is one of the most closely-watched wide-body aircraft orders of the year.

Airbus and IAG officials both declined to comment.

"This has been a big fight," said an industry source, adding that a wider overhaul of BA's fleet could include orders at a later stage for the revamped Boeing jet known for now as "777X."

The face-off between the "big twins" is the next big battle in the $100 billion a year commercial jet industry. The world's dominant planemakers are looking at thousands of orders for large twin-engined jets as older models approach retirement.

Some industry commentators have accused Boeing of leaving the door open to Airbus's latest designs by appearing to drag out the launch of its proposed "777X," especially while distracted by the Dreamliner's grounding over safety concerns.   Continued...

The Boeing logo is seen on a Boeing 787 Dreamliner airplane in Long Beach, California March 14, 2012. REUTERS/Lucy Nicholson