Airbus seals riposte to rivals as regulators back revamped A320

Tue Nov 24, 2015 11:12am EST
 
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By Tim Hepher

PARIS Nov 24 (Reuters) - Airbus said on Tuesday it had won certification for the A320neo, paving the way for first delivery of a revamped, best-selling jet that has shored up its joint domination of the global jet market with Boeing and galvanised its share price.

The European planemaker said the European Aviation Safety Agency (EASA) and the Federal Aviation Administration (FAA) of the United States had jointly approved the model, which is a fuel-efficient upgrade of its popular A320 medium-haul jet.

The approval is a boost for United Technologies unit Pratt & Whitney, whose decision to develop a new generation of engines accelerated a series of projects from Canada to Russia and whose engines will power the first A320neo in service.

Qatar Airways is expected to take first delivery next month of the first of more than 4,300 revamped jets to be sold since Airbus launched the A320neo promising 15 percent fuel savings.

A similar version powered by alternative engines from French-U.S. venture CFM International, co-owned by Safran and General Electric, is expected to win certification in coming months, Airbus said in a statement.

Airbus took the risky decision to upgrade its most popular model, which serves as cash cow for Europe's largest aerospace group, in December 2010 after witnessing a challenge from potential new entrants including Canada's Bombardier.

Boeing followed suit a year later with plans to upgrade its popular 737 model, which has also generated thousands of sales.

The decision by both plane giants to defend a segment of the market estimated at $2 trillion over 20 years catapulted shares in both companies and a raft of suppliers to record levels, with Airbus Group more than trebling in value during the development.

In a stark reminder of the challenges facing potential competitors, just as Airbus was completing its counter-move by winning regulatory approval for the A320neo, Bombardier was briefing investors on turnaround plans after running into delays and cash shortages with its rival CSeries.

Bombardier is expected to win certification for its new plane in coming days but remains under pressure to boost sales, having won a double cash lifeline from Quebec. (Additional reporting by Sudip Kar-Gupta, Cyril Altmeyer; editing by Adrian Croft)