Recent orders with Virgin America and IndiGo reach into tens of billions of euros
Airbus is enjoying a renewed boost to its reputation following last year’s public relations mishaps surrounding the need to replace many of the Rolls Royce engines on its A380 super-jumbos. Virgin America has announced that it placed an order towards the end of last year for 60 Airbus A320 aircraft, including 30 of the more fuel-efficient NEO versions of the A320.
The order with the European aircraft-maker effectively triples the carrier’s fleet as it focuses on an expansion of its routes in North America. Coming in the wake of a record-breaking €11.5 billion agreement a week ago with the Indian airline IndiGo, a low-cost carrier based in Delhi, the order propels Airbus ahead of Boeing for orders over the last 12 months.
However, rival plane-maker Boeing also got a boost last week when China announced during President Hu Jintao’s visit to Washington that it would buy an extra 200 of its aircraft. The new orders, as well as high production investment costs and a weak dollar, pushed Airbus into announcing last week a 4.4% increase on average in its aircraft list prices. Earlier, Boeing had announced an average 5.2% price increase on its aircraft.
Both manufacturers saw a sharp recovery in business during 2010, which means that they are less likely in future to sell their planes at a discount to list prices. Regarding both net aircraft orders and aircraft deliveries, Airbus currently has approximately 52% of the world market. But it is being squeezed by a weak dollar since aircraft are sold in dollars while its accounts are in euros.
The Economist / Reuters