UPDATE 1-Revamped Airbus A320neo debuts as oil slide continues

Wed Jan 20, 2016 12:40pm EST
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By Tim Hepher

DUBLIN Jan 20 (Reuters) - European planemaker Airbus said on Wednesday it had delivered the first A320neo, a fuel-efficient upgrade of its best-selling jetliner, to German carrier Lufthansa.

The delivery marks the culmination of a five-year plan to give a new lease of life to Airbus's profitable A320 narrowbody jet family by revamping it with new engines.

The handover is a boost for United Technologies unit Pratt & Whitney, whose decision to develop a new generation of engines accelerated plane projects from Canada to Russia and triggered a heavyweight riposte from Airbus and Boeing.

Both have amassed thousands of new orders and shored up their domination of the global jet market by refreshing their short-haul models, though Canada's Bombardier and Brazil's Embraer continue to compete hard for sales.

But the arrival of the first re-engined jet coincides with a slump in oil prices that has sparked debate over the sustainability of demand for fuel-saving jets, as well as financial market losses caused by concerns over the economy.

Aircraft financiers have been busy for the past few years bankrolling orders of the A320neo and Boeing's rival 737 MAX, due to enter service in 2017.

But at the industry's annual gathering in Dublin this week, financiers have been split over what the slide in oil prices from $114 a barrel in June 2014, to barely $28 today, means for both demand and the revenues linked to the two revamped models.   Continued...