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Airbus secures Libyan jet order

Libya returned to the global aviation market for the first time on a significant scale in almost 30 years on Tuesday with a deal to buy Airbus jets for $1.7 billion.
/ Source: The Associated Press

Airbus announced the sale of 12 passenger jets to Libya’s Afriqiyah Airways on Tuesday, securing one of the first plane deals with the North African nation since international sanctions were lifted.

Tripoli-based Afriqiyah signed nonbinding commitments to buy nine jets from the single-aisle A320 family and three larger A330 widebody airliners in a deal worth about $1.7 billion at list price.

“We are proud of this sign of confidence, and look forward to creating a long-term win-win cooperation,” Airbus Chief Executive Christian Streiff said on the second day of the Farnborough International Airshow.

But Boeing Co. appeared to be extending the lead it took in the first half of the year, when Airbus recorded just 117 gross orders — less than a quarter of its U.S. rival’s total. Airbus beat Boeing’s orders for a fifth straight year in 2005 but looks increasingly likely to fall behind this year.

Boeing announced the sale of 10 747-8F freighters to Dubai-based airline Emirates, worth $3.3 billion at list prices. It also said it sold 14 737s to Aviation Capital Group and six 787 Dreamliners to Pegasus in a further $1.9 billion of orders from U.S. leasing companies.

All values are at catalog rates, since actual financial terms are never disclosed and airlines typically negotiate discounts.

The latest deals take Boeing’s order tally so far at Farnborough — one of the biggest events in the aeronautical industry calendar — to 62 jets listed at a worth of $7.9 billion.

The Airbus order from Afriqiyah, together with the sale of an additional A330 plane to Caribbean operator Air Caraibes announced Tuesday, leaves the European jet maker with 23 jet orders so far from the show, worth $2.6 billion.

In a separate deal with Libyan authorities, Airbus parent European Aeronautic Defence & Space Co. also agreed to build a pilot training and maintenance center in Tripoli.

Both the United States and EU eased sanctions against Libya in 2004, opening the way for the sale of airliners and other technologies to the country.

Afriqiyah Chief Executive Abdallah Sabri Shadi said the deal was the first significant Libyan plane order in 30 years, and predicted more Libyan business for both Airbus and rival Boeing — which last year won an order for three Boeing 737s from another Libyan carrier, Buraq Air.

Boeing was also considered for the Afriqiyah deal, Sabri Shadi said. “There were negotiations that took a couple of months. In the end, we selected the right products.”

Airbus is seeking to reassure investors at Farnborough that it is back on track after further delays to its flagship A380 superjumbo sparked high-level management changes — that after customer dissatisfaction with the mid-sized A350 program forced the plane back to the drawing board.

Airbus announced a major revamp of the A350 program Monday, almost doubling its budget to $10 billion. It vowed that the new A350XWB — for “extra-wide body” — will hold its own against two of Boeing’s best-selling jets, the 787 Dreamliner and 777, when it enters service in 2012.

Before the revamp, Airbus had received only 100 firm orders for the A350, compared to 360 for the Dreamliner.

Airbus fell behind on total order value last year as its larger A340 jet lost ground to Boeing’s more efficient 777, and the redesign is intended to make the A350 an effective competitor against Boeing’s twin-engined jet.

Mike Bair, head of Boeing’s 787 program, said Tuesday that the company was prepared for competition from its European rival.

“It’s still relatively vague about exactly what they are doing, but we always anticipated some kind of competition from Airbus,” Bair said during a news conference.

Even amid its current difficulties, however, there are signs that Airbus can still cause trouble for Boeing.

The Chicago-based company on Monday recalled a news release announcing an order for 20 777s from Qatar Airways, but insisted the $4.9 billion deal had nonetheless been finalized.

But Qatar said it was still in talks with both Boeing and Airbus, and that no decision had been made