BRITISH Airways Plc ordered a total of 36 Airbus SAS and Boeing Co planes valued at US$8.2 billion, making its biggest purchase in nine years to add seats from London's Heathrow airport and keep pace with Virgin Atlantic Airways.
The carrier will purchase 24 Boeing 787 Dreamliners and 12 Airbus A380 superjumbos, Chief Executive Officer Willie Walsh said yesterday, Bloomberg News reported. The long-haul planes will be powered by Rolls-Royce Group Plc engines, with deliveries starting in 2010.
Europe's third-largest airline will use the 525-seat A380s on high-density routes to Hong Kong, Los Angeles and San Francisco, making the best use of Heathrow's limited capacity, Walsh said on a conference call. The smaller 787s will open up new destinations and add frequencies for business travelers to New York, he said. The share of the contract for both Boeing and Airbus is about US$4 billion, based on list prices.
"British Airways needed to grow or face profit stagnation," said Chris Avery, an analyst at JP Morgan in London with a "neutral" rating on the stock. "BA has not expanded its long-haul fleet since 9/11, while competitors such as Virgin and the new business-class carriers have."
European Aeronautic, Defense & Space Co, parent of Toulouse, France-based Airbus, rose as much as 2.9 percent to 21.68 euros before trading at 21.49 euros. The A380 contract is the first in almost two years from a new customer after the introduction of the world's biggest passenger plane was delayed for 24 months by wiring problems.
The aircraft ordered are needed to replace aging Boeing 767s and 747 jumbo jets and to compete with Virgin, owned by British billionaire Richard Branson, and business-only startups such as Silverjet Plc.
The new planes will operate from a new fifth terminal at Heathrow, Europe's busiest airport, which opens in March. The A380s will serve locations including Singapore and South Africa, where the airline needs to maximize capacity, Walsh said. The 787 is better-suited to time-sensitive routes where travelers demand a greater number of daily departures.