- The Washington Times - Friday, September 28, 2007

LONDON (AP) — British Airways PLC divided its largest aircraft order in nine years between rivals Airbus and Boeing Co. yesterday as the airline prepares to increase capacity on its long-haul routes.

BA’s decision to book a dozen Airbus A380 superjumbos along with 24 Boeing 787 Dreamliners in a much-anticipated order worth $8.2 billion at list prices ends decades of Boeing’s dominance in providing planes to the carrier.

It is also a vote of confidence in Airbus’ previously troubled double-decker A380. Deliveries of the aircraft were delayed for two years because of wiring and other technical problems that cost the company billions of euros.

BA Chief Executive Willie Walsh said that the airline had opted for the A380 rather than Boeing’s newly revamped 747-8 for environmental and economic reasons.

The 525-seat Airbus plane will enable BA to increase capacity on its flights out of congested Heathrow Airport, where takeoff slots are limited, to destinations including Hong Kong, Los Angeles and San Francisco.

BA will use the 250-seat Boeing 787s to build up new routes, including destinations that the airline’s existing fleet of Boeing 767s and 747s cannot serve.

“We see opportunities in South America, Asia and North America,” said Mr. Walsh.

The new planes will be delivered between 2010 and 2014, allowing BA to expand its capacity by up to 4 percent per year.

Analysts say that is important for the Europe’s third-largest airline to keep up with competitors that have more aggressively expanded their long-haul fleets since the September 11 terrorist attacks in the United States.

Virgin Atlantic Airways’ passenger total grew 16 percent last year, eight times the growth at BA.

Mr. Walsh said the green credentials of the airline’s new purchases will “contribute significantly” to its target of improving fuel efficiency by 25 percent between 2005 and 2025.

BA has also taken options to buy 18 more Dreamliners and seven more A380s, and Mr. Walsh said that the airline is continuing to look at Airbus’ medium-range A350XWB, which has been delayed until 2013 after unhappy customers forced an expensive redesign, and Boeing’s 777-300ER.

“We didn’t feel we had sufficient clarity on each so we are continuing negotiations over the next 18 months,” he said.

Analysts said that the rivalry between the two plane manufacturers had likely resulted in a significant discount on the list prices for the order announced yesterday.

“Pricing may have played a role, as British Airways was able to play Boeing off against Airbus,” said Howard A. Rubel at Jeffries & Co.

Collins Stewart analyst Andrew Fitchie said that BA probably paid closer to $6 billion.

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