Bloomberg News

Lufthansa Said to See Boeing-Airbus Split on $14 Billion of Jets

September 13, 2013

Lufthansa Said to See Boeing-Airbus Split on $14 Billion of Jets

An aircraft operated by Deutsche Lufthansa AG, left, takes off alongside a tail fin displaying the company's logo at Frankfurt airport. Photographer: Hannelore Foerster/Bloomberg

Deutsche Lufthansa AG (LHA) will split an order for about 50 wide-body aircraft between Airbus SAS and Boeing Co. (BA:US), a purchase with a list value of at least $14 billion, people with knowledge of the matter said.

The twin-engine jets will be Boeing’s new 777-9X, which is due to fly by decade’s end, and Airbus’s A350-900, said two of the people, who asked not to be identified because the details aren’t yet public. An announcement may come as soon as next week, the people said.

Dividing the deal provides a boost for both planemakers after Cologne, Germany-based Lufthansa had said the order would be a winner-take-all contest. Lufthansa hasn’t bought 777s for its own passenger operations before, and has previously relied heavily on jets from Toulouse, France-based Airbus.

Lufthansa, Europe’s second-largest airline, now uses four-engine Airbus A340-300s and A340-600s for some long-haul routes. The carrier ordered 108 planes in May, including 100 Airbus A320 narrow-bodies, in a transaction with a catalog value of about $12.4 billion. Airlines typically buy at a discount.

Boeing jets will make up a majority of the order, said one of the people.

“No fleet decision has yet been taken by the Lufthansa supervisory board,” Thomas Jachnow, a Lufthansa spokesman, said today by telephone. Any announcement will follow the board’s approval of management’s fleet recommendation, he said.

Stefan Schaffrath, an Airbus spokesman, and Doug Alder of Chicago-based Boeing declined to comment.

New Engines

With the 777X, Lufthansa will become the first purchaser for the new model, the people said. The 777, the world’s biggest twin-engine airliner, will feature new engines on the X variant and the largest wing ever on a Boeing plane to help improve performance.

The wide-body order will surpass the May purchase and be Lufthansa’s largest ever, according to a person familiar with the matter, who asked not to be identified.

A precise deal value couldn’t immediately be determined, because of the lack of specifics on which planes are in the order and on what Boeing will charge for 777X once the jet’s development gets final approval. It will be bigger and more expensive than the current 777, whose largest variant lists for $320.2 million. Airbus offers the A350-900 for $287.7 million.

To contact the reporters on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net; Julie Johnsson in Chicago at jjohnsson@bloomberg.net; Robert Wall in London at rwall6@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Ed Dufner at edufner@bloomberg.net


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