Boeing leads Airbus in race for United order: sources


Boeing Co has pulled ahead of Airbus in a race to win an aircraft order potentially worth more than $15 billion at list value with United Continental Holdings but intense negotiations lie ahead to close a deal that Airbus is unlikely to abandon without a fight, industry sources said.

Three sources familiar with the talks said on Monday that Boeing is now seen as the front-runner for the order for about 180 narrowbody airplanes, which would feature mostly the upcoming, fuel-efficient upgrades to the Boeing 737 and the Airbus A320.

The sources said a deal could be concluded this summer. United, Boeing and Airbus declined to comment on the upcoming order, Reuters reports.
“It is possible that they could do a deal with Boeing now and wink at Airbus and that between now and the end of the year there will be some kind of Airbus order,” said a senior industry source, who asked not to be identified because of the confidential nature of the talks.

United Airlines merged in 2010 with Continental Airlines, becoming the world’s largest airline. United and Boeing are Chicago-based, and Airbus is a unit of European company EADS.
“Having merged with Continental, United has a mixed fleet which is dominated by Boeing aircraft, though the current United management team is effectively the Continental team, which had an exclusive Boeing supply relationship for many years,” said Rob Stallard, an aerospace analyst with RBC Capital Markets.

Bloomberg reported on Monday that Airbus had dropped out of the contest.
“Any deal is not over until it is signed,” Stallard said.

Boeing and Airbus, the world’s two largest plane-makers, are competing for customers for the next versions of their best-selling narrowbodies. The 737 MAX, due to enter service in 2017, battles the Airbus A320neo, due to enter service in 2015. Both planes promise double-digit fuel savings.

Narrowbody jets are the industry’s workhorse, feeding the big hubs or operating quick turnarounds for low-cost carriers.

Boeing, which hopes to overtake its rival in orders this year, aims to prevent a repeat of a dramatic win by the European plane-maker at rival American Airlines last year.

American, a unit of bankrupt AMR Corp (AAMRQ.PK), placed an order for 460 narrowbodies last year before entering Chapter 11. The airline previously had been an all-Boeing customer.

Last year, Delta Air Lines (DAL.N) ordered 100 Next-Generation 737-900ER airplanes with a total list value of $8.5 billion.

Carriers often negotiate airplane purchases at prices well below list value.

Shares of Boeing closed down 69 cents at $72.86 on the New York Stock Exchange.