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Thursday, 1 December 2011

Airbus Updates No.540

Airbus Says American To Reaffirm Plane Orders

Airbus's sales chief, John Leahy, said that American Airlines has been clear that it intends to confirm its plane contracts.

Leahy added that he expects the US carrier, which filed for Chapter 11 protection on Tuesday, to dump older, less efficient planes more quickly as it restructures.

"I think you'll see a faster renewal of their fleet," Leahy told a conference in New York.

This year, American placed a giant split order for 460 single-aisle jets worth up to USD$40 billion with Airbus and Boeing. Bankruptcy could endanger parts of the order that are not firm.

Leahy said he expects more airline orders, mentioning recent reports of a potential order that could be decided late this year or early next year by United Continental.

Leahy also said that he expects India's Kingfisher Airlines, a carrier that is looking to shore up its finances, will be able to sort out its problems.

Shares in Kingfisher have tumbled in recent weeks as the airline seeks to raise funds. The company saw its losses double in the September quarter on high fuel costs and price competition.

"Kingfisher is one of our good customers," Leahy said. He added that chairman Vijay Mallya was bringing in new management and understands the need to drop unprofitable routes.

"We have high hopes that he'll get things sorted out," Leahy said. "He needs to be more focused and he's now doing that."

Leahy added that there are no Kingfisher orders that were at risk in the production cycle.

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