Airbus in record 430 plane deal with budget airline backer Franke
Aerospace firm to sell 430 planes to Indigo Partners for $49.5bn
DUBAI: Airbus signed a $49.5 billion deal yesterday to sell 430 airplanes to the Phoenix-based private equity firm that owns Frontier Airlines, striking the European aerospace company’s biggest deal ever at the Dubai Air Show.
Meanwhile, Boeing reached an agreement with low-cost carrier FlyDubai to sell 225 Boeing 737 MAX 10 aircraft - a deal valued at
$27 billion. The developments came ahead of the biennial air show closing today. “It’s ended up going out on a high,” airline analyst John Strickland of JLS Consulting said.
“It shows once again the importance of this part of the world to the big airplane manufacturers.”
The Airbus deal with Indigo Partners will see 273 A320neos and 157 A321neos split up among Denver-based Frontier, JetSMART of Chile, Volaris of Mexico and Wizz Air of Hungary, all ultralow-cost airlines associated with Indigo.
The A320neo and the A321neo are twinengine, single-aisle planes popular among airlines because of their reduced fuel consumption. The surprise announcement came after Airbus on Sunday suffered the embarrassment of believing it had struck a major deal with the state-owned carrier Emirates to sell its A380 double-decker jumbo jet, only to see Boeing sit on the podium with the airline and sign a $15.1 billion deal.
“Just to clarify: This is not an A380 press conference,” joked John Leahy, Airbus’ sales chief, as the start of the announcement. A320neos list for $108.4 million apiece and A321neos at $127 million. Airlines and manufacturers negotiate lower prices for big deals like these, something Indigo’s managing partner Bill Franke was quick to stress afterward speaking to journalists.
“Here’s hoping,” he said. “Their objective is to sell aircraft at the best possible and our objective is to buy aircraft at the best possible price. I’ve known Mr. Leahy for 25 years. Sometimes he wins, sometimes I win.”
Asked if he won this round, Franke said: “That’ll be a good question.” Airbus’ previous biggest-ever sale came in August 2015, when it sold 250 A320neos to Indian budget airline IndiGo, a deal estimated to be worth $26 billion at list prices. IndiGo and Indigo Partners are separate firms with separate management. Shares in Airbus rose on the news, trading 2.7 percent higher at 85.75
Biennial air show closing today
euros in Paris in an otherwise lower market.
Franke is a pioneer of the cheap tickets and high fees airline business that has spread overseas and is growing in the United States. Such carriers offer low base fares but adds fees to stow a carry-on bag, get an assigned seat and other extras. That’s led to soaring customer complaints against Frontier. — AP