Daily News Articles for the Transport Sector, 2008

Khulu Phasiwe, Business Day
Trade and Industry Correspondent

BRITISH Airways (BA) yesterday ordered 12 Airbus A380s and 24 Boeing 787 Dreamliner jet airliners in what has been one of the most closely watched and hard-fought rivalries between the two aircraft manufacturers.

The $8,2bn fleet renewal order is BA’s largest since 1998.

Europe’s third-largest airline after Air France-KLM and Lufthansa said it had ordered 12 Airbus A380s with options for a further seven, and 24 Boeing 787s with options for a further 18.

The aircraft would be delivered between 2010 and 2014.

BA said it had arranged $1,5bn of debt financing from a group of banks to cover all the carrier’s orders to the end of 2011.

BA said the orders would enable it to increase its capacity about 4% a year, in line with the growth of the market.

Some of the new planes will be used on the London Heathrow-Johannesburg route, a move that will up the ante in the growing battle for passengers between BA, South African Airways (SAA) and Virgin Atlantic on that route.

BA said that the new aircraft would replace 34 older Boeing 767s and 747s.

Although SAA had said it would not order any new aircraft until it had returned to sustainable profitability, the national carrier said it would also ground its six 747s and replace them with the new fuel-efficient Airbus A340-300s it had leased to India’s Jet Airways.

SAA said it would revamp its London-Johannesburg flights to stem the losses it was incurring on that route. Last year the state-owned airline lost R500m on the lucrative route.

The orders from BA represent a vote of confidence in the A380, in which Airbus is seeking to recover from big problems in bringing the aircraft into series production, with delays of up to two years in delivery.

While several of the early buyers — including Singapore Airlines, Emirates and Qantas — have since increased their orders, the BA purchase marks the first of what Airbus hopes will be a wave of new orders from leading carriers that have not previously backed the world’s biggest commercial jet.

For Boeing, the order provides further support for the 787 Dreamliner, already the most successful aircraft launched, which is to enter commercial service for the first time with Japan’s All Nippon Airways next May .

BA said that the orders formed part of its strategy to renew and to expand its existing fleet of 114 long-haul aircraft. With Financial Times