Virgin Atlantic signs $4.4 billion order for 12 A350s

Mon Jul 11, 2016 12:35pm EDT
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FARNBOROUGH, England (Reuters) - Virgin Atlantic signed a deal on Monday to buy 12 Airbus (AIR.PA: Quote) A350-1000 aircraft in a $4.4 billion order which will help the UK-based airline modernize its fleet, though a plan to buy A380 superjumbos remained on the backburner.

Virgin Atlantic said it still had options to buy six Airbus A380s although industry sources have told Reuters the long-deferred deal is likely to be canceled.

The airline, 51 percent-owned by billionaire founder Richard Branson and 49 percent-owned by U.S. carrier Delta Air Lines (DAL.N: Quote), is keeping the A380s option open for now as there was no cost in doing so, said CFO Shai Weiss.

"We may need it, there's no benefit of not having many possibilities," he said on the sidelines of the Farnborough Airshow.

The new A350 jets would be delivered between 2019 and 2021, Weiss said. They will be powered by Rolls-Royce (RR.L: Quote) engines and Virgin would own eight of the 12, and lease the rest.

Virgin's A350 purchase was a shot in the arm for the Airbus 360 to 410 seater jet whose sales have slowed as Boeing develops a larger version of its 777 model.

Virgin Chief Executive Craig Kreeger said further purchases could follow.

"To the extent that the aircraft makes sense we would obviously consider acquiring more in future," he said.

Asked about the impact of Brexit on travel demand, CFO Weiss said it was too early to tell but Virgin's outlook for the rest of the year was positive as its customers tended to book early.   Continued...

Richard Branson unveils the new SpaceShipTwo, a six-passenger two-pilot vehicle meant to ferry people into space that replaces a rocket destroyed during a test flight in October 2014, in Mojave, California, United States, February 19, 2016.  REUTERS/Lucy Nicholson