KEY POINTS:
Boeing won the first round in a US$10bn contest with Airbus to re-equip the British Airways fleet yesterday, after the US plane-maker clinched an initial order for up to eight long-range aircraft.
BA is purchasing four Boeing 777-200ER aircraft and taking options on a further four in preference to the Airbus A330, in a deal worth up to US$1.6bn.
The move is a setback for Airbus, which was thrown into renewed turmoil this week when its French and German shareholders failed to reach agreement on a critical restructuring ofthe company.
However, BA maintained that the decision would have no bearing on which manufacturer it chooses for a much bigger order for 34 long-haul aircraft, laterthis year.
The four 777 jets ordered yesterday will be delivered early in 2009, and will be used to help expand BA's capacity.
The list price for the aircraft is US$201m, but Robert Boyle, BA's commercial director, said it had received a "substantial discount" from Boeing.
The order for 34 aircraft, due to be placed in the autumn, is for aircraft to replace BA's ageing fleet of 14 Boeing 767s and 20 Boeing 747s.
Airbus is vying for the huge deal with two new aircraft, the A380 super-jumbo and A350 XWB, and its existing A330.
Boeing is also offering BA two new models, the 787 Dreamliner and stretched 747-8 jumbo, alongsidethe 777.
Mr Boyle said that the initial order announced yesterday had been a "close decision" but had gone Boeing's way because BA already had 43 777s in its fleet, and assimilating a further eight was easier than purchasing a small number of A330s.
He went on to stress that the bigger order remained wide open and that BA expected "a similarly competitive approach" from the world's two biggest manufacturers.
"The A350 and A380 are good aeroplanes and it is more than possible that they will come out as the best aircraft for us," he added.
BA will need to start introducing the replacement aircraft from 2011 which puts the new A350 at a possible disadvantage, as it will not enter service until 2012 or 2013.
However, one option for Airbus would be to supply BA with A330s until the A350 is ready.
The engine contest for the eight 777s on order or optioned is still open between Rolls-Royce and General Electric of the US.
Although the bulk of the 777s in the BA fleet use GE engines, the particular variant ordered yesterday, the 777-200ER, can also be powered by Rolls Trent engine.
- INDEPENDENT
