Airbus, Boeing battle over long-haul jets heats up

By Siva Govindasamy

CAPE TOWN (Reuters) - The battle between Airbus and Boeing over their next-generation of long-haul jets is heating up, with a string of major airlines flagging plans on Monday to place multi-billion dollar orders.

Germany's Lufthansa , Japan Airlines and Malaysia Airlines were among carriers at the International Air Transport Association's (IATA) annual general meeting to say they were sizing up Airbus's new A350 widebody jets and Boeing's rival 787 Dreamliner and revamped 777 models.

Airbus and Boeing compete for the lion's share of a jet market estimated at $100 billion a year. While recent years have seen them battling over smaller Airbus A320 and Boeing 737 aircraft, interest in larger fuel-efficient planes is on the rise, suggesting airlines are betting on an upturn in the global economy and therefore their premium and long-haul markets.

IATA, the airline trade body, on Monday hiked its 2013 industry profit forecast by 20 percent to $12.7 billion, encouraged by cost cutting and lower oil prices.

Airline executives at the IATA meeting in Cape Town, South Africa, said the stage was set for a slew of orders at the Paris Airshow later this month, and a sustained campaign by Europe's Airbus and U.S. rival Boeing to win more customers.

The executives told Reuters they had been receiving briefings on Boeing's proposed 787-10X and the 777X, the latest variants of both aircraft.

Industry sources say the 787-10X could be launched in Paris and the 777X later this year, but caution this is dependent on delicate negotiations with potential buyers and production plans. A launch of the stretched 787-10X would imply an increase in Boeing's plans to make 10 Dreamliners a month from end-2013.

Airbus, meanwhile, is pushing the A350-1000, the largest of three variants, as an alternative to the popular 777-300ER and has gained traction over the last year with several high profile buyers such as Cathay Pacific .

POWER STRUGGLE

Some of the bigger potential customers in coming months include Lufthansa for around 50 aircraft, Japan Airlines (JAL) for 40 jets, and Malaysia Airlines for around 30 aircraft.

Others include Japan's All Nippon Airways (ANA) , Garuda Indonesia , and Ethiopian Airlines . All are keen to assess both Airbus and Boeing aircraft for their requirements, worth tens of billions of dollars at list prices.

Among the most closely watched competitions are those held by ANA and JAL, which are considering orders for A350s.

That could mark a seismic shift in the airline world as JAL operates only Boeing aircraft and ANA, which has Airbus A320 narrowbody aircraft, operates only Boeing jets on its medium and long-haul services. Amid tough competition, analysts say Japanese airlines could pick up the Airbus aircraft.

Both airlines, however, will talk to both aircraft suppliers as they want to get the best possible deal. ANA, for example, says that it will assess the proposed 777X as well as the A350 to replace its older 777s.

Strong demand for the 787s and A350s and a large backlog mean Boeing and Airbus have sold out early delivery slots. Some airlines like Garuda Indonesia are potentially getting their aircraft from leasing companies instead.

"The slots are tight but we need the aircraft in the 2016-2017 timeframe," said Garuda's chief executive Emirsyah Satar. "Leasing companies can be the answer for us as they can supply the aircraft when we need them."

(Editing by Mark Potter)

Source: http://news.yahoo.com/airbus-boeing-battle-over-long-haul-jets-heats-164530601.html

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