Airbus Updates No.126

Airbus Wins A320neo Order From Lufthansa, First From Top Carrier

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Airbus SAS won an order for 30 of its new A320neo-series planes from Deutsche Lufthansa AG valued at about $2.8 billion at list price, the fourth commitment for the model and the first from a top global carrier. Source: Airbus SAS via Bloomberg

Airbus SAS won an order for 30 of its new A320neo-series planes from Deutsche Lufthansa AG (LHA) valued at about $2.8 billion at list price, the fourth commitment for the model and the first from a top global carrier.

The contract specifies 25 standard A320neos and five larger A321s, Cologne, Germany-based Lufthansa said today in a statement. The aircraft will be delivered from 2016, it said.

Lufthansa, which also ordered five Boeing Co. (BA) 777 cargo planes worth $1.35 billion, is renewing its fleet to cut costs and replace smaller regional planes with larger models. The neo, a version of Airbus’s existing short-haul jet fitted with new engines, will burn 15 percent less kerosene, the airline said.

“Besides greater fuel efficiency, all the models on order will help lower operating costs as well as noise levels and emissions,” Lufthansa said. “The orders are yet further steps in Lufthansa’s ongoing fleet modernization and expansion policy.”

Airbus’s contract from Lufthansa, Europe’s second-largest airline, comes as Chicago-based Boeing ponders an upgrade of the competing 737 model. Randy Tinseth, director of marketing at the U.S. company’s commercial airplanes group, has said the matter will be decided by the summer.

Success in the single-aisle market is critical because Airbus and Boeing derive the bulk of their earnings from the aircraft. Airbus, the planemaking unit of European Aeronautic, Defence & Space Co., predicted in December that it could sell as many as 4,000 of the modified A320 planes over 15 years.

The Lufthansa order comes after India’s IndiGo pledged in January to buy 150 A3230neos and U.K. billionaire Richard Branson’s Virgin America Inc. said the same month it would buy 30 of the revamped planes and 30 of the current model. Brazil’s Tam SA followed last month, saying it had ordered 22 neos.

A geared turbofan engine built by United Technologies Corp. (UTX)’s Pratt & Whitney unit and the Leap-X from CFM International, the venture of General Electric Co. (GE) and Safran SA (SAF) of France, are the choices for powering the A320neo.

Lufthansa’s statement didn’t specify a choice of engine. The carrier is already a customer for Bombardier Inc.’s CSeries short-haul plane, which will use the Pratt & Whitney powerplant.

Lufthansa’s main-brand airline had 228 narrow-body jets in its fleet as of Sept. 30, according to its quarterly report, including 117 from Airbus’s A320 series. The 777 freighters will be added from 2013, it said today.