Airbus A320neo 'obsolete in a decade', claims Boeing

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Airbus A320neo 'obsolete in a decade', claims Boeing

The Airbus A320neo (New Engine Option) aims to extend the life of the manufacturer's best-selling model while it works on a successor.

The Airbus A320neo (New Engine Option) aims to extend the life of the manufacturer's best-selling model while it works on a successor.

A war of words between the world's two largest aircraft manufacturers is continuing, as Boeing and Airbus prepare for a major battle over the future of the narrow-body plane market.

A $US9 billion ($A8.4 billion), 100-plane order from the leasing arm of US insurance group AIG has lifted Airbus above Boeing in new jetliner sales this year, putting pressure on the EADS unit rival to clarify its next plane design.

Fuelled by a turnaround from the worst aviation recession in memory, the two plane-makers are battling for control of the next stage of a $US1.7 trillion market for the 100- to 200-seat planes favoured by airlines on medium-length routes.

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Europe's Airbus saw its April order book boosted by confirmation of a deal by American International Group's International Lease Finance Corp to buy the newest Airbus narrow-body planes, even though it also lost a prestige order for 10 A380 superjumbos from the same company.

The purchase confirms a stronger outlook for ILFC after it was hit by the financial crisis and is a sign of confidence in upcoming revamped versions of the best-selling A320 family. The "A320neo" will feature new engines with greater fuel-efficiency.

Boeing has poured cold water on the Airbus project, saying it will be obsolete in a decade.

It has promised to announce its own plans for the largest segment of the aircraft market around the middle of the year; but powerful ILFC said when announcing a preliminary version of the deal that it was not prepared to wait for Boeing's plans.

"Common sense says this will put further pressure on Boeing to fast-forward their 737 update," said Howard Wheeldon, senior strategist at BGC Partners in London.

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Airbus said it sold 169 jets between January 1 and the end of April, pushing it past Boeing's 153 gross orders. But after cancellations, Boeing remained ahead of Airbus with net orders of 106 aircraft compared with the European tally of 90.

The Boeing figures are based on data up to April 26. The US company said yesterday it took four new orders in the latest reporting week and lost one, bringing its net 2011 orders to 109 and its gross orders to 157.

FUEL SAVINGS

There were also fresh signs on Thursday that airlines, especially those facing the worst cost pressures, are favoring a new generation of lightweight aircraft as rising fuel prices threaten to drive the industry's recovery off-course.

Irish carrier Aer Lingus cancelled a remaining order for three undelivered, aluminum-built Airbus A330 passenger jets and switched to the carbon-composite A350-900, boosting its order for the $US270-million jet to nine from six, Airbus data showed.

Dutch lessor AerCap trimmed an order for the A330 -- an aircraft which has sold well as Boeing has run into production delays on its next-generation 787 Dreamliner, but which is based on older technology than either the 787 or the A350.

Aer Lingus says it may ramp up a controversial cost-cutting program after confirming profit this year will be significantly below 2010 levels.

Shares in Airbus parent EADS fell 1 percent on Thursday in line with a weaker European market.

ILFC confirmed a decision to cancel an order for 10 A380s worth $US3.8 billion at current prices. The order had been in jeopardy because airlines prefer to customize the double-decker aircraft, making it harder for leasing companies to own the aircraft and switch them among customers' fleets.

With 234 sales, Airbus is seen as a long way off reaching the break-even point on the world's largest airliner as production costs have been driven up by a slow recovery from manufacturing delays.

Airbus said it had delivered 167 aircraft in the first four months of the year, including five A350s.

Reuters

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