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    Categories: Financial Blog

Airbus landed a $50 Billion Jet Deal to outshine Boeing in Dubai

Airbus Group Inc. manufactures and supplies commercial aviation, defense and homeland security, and helicopters. The company also provides telecommunications and services.

Airbus provides helicopters to the coast guard, shipboard multi mode acquisition radars for the U.S. Navy’s Littoral Combat Ship and the Coast Guard’s National Security Cutter, ocean sentry aircrafts for coast guard maritime patrol and support missions

 

Supplies aeronautics, space and other related products and services globally. The company operates through three segments:

  • Airbus Commercial Aircraft
  • Airbus Helicopters
  • Airbus Defense and Space Segments

 

The Airbus Commercial Aircraft segment manufactures, develops, markets and sells commercial jet aircraft with about 100 sets. It also provides regional turboprop aircraft and aircraft components as well as aircraft conversion and other related services.

The Airbus SE revealed the largest commercial-plane transaction in the company’s history. At the Dubai Airshow, the company was able to snag an order for a single aisle aircraft with a price of about $50 billion, outperforming Boeing Co.s’ $20 billion super deal.

It is also considered as a highlight achievement for John Leahy, the sales chief of the company who plans to retire after landing more than 16,000 jets and the lifted European plane maker into a duopoly level with Boeing.

With Bill Franke leading the Indigo Partners, the Airbus accord gives and upgraded narrow body aircraft to maximize the fleets of low cost carriers flying from Denver to Budapest.

 

The aircrafts will go to the four companies within Indigo’s investment portfolio:

  • Frontier Airlines
  • Mexico’s Volaris
  • East European operator Wizz Air Holdings Plc
  • Chile’s Jetsmart

 

The deal includes 273 A320neo jets featuring 157 of the larger A321neo variant which were prices at $49.5 billion without customary discounts.

According to Leahy, the transaction was “remarkable”. Franke, the founder of Indigo, stated that it emphasizes his confidence in the A329 and bargain fares, no frills travel model he helped develop.

As of 11:13am in Paris, Airbus shares increased as much as 4 percent and were trading at a percentage of 2.9 higher at 85.93 euros. Pulling up the gain this year to 37 percent.

Meanwhile Boeing recovers with the sale of 175,737 Max planes, the main rival to the A320 model, to FlyDubai. This deal was considered to be big enough to dominate airshows.

 

The Indigo deal exceeded Airbus’ past order book for the year for more than double the number, which was at about 290 aircraft as of October 31, pushing the manufacturer’s backlog more than 7,000 jets and reverses predictions that orders will trail in the year 2017.

The deal will also aid Airbus catch up to its competitor, Boeing, in the order tally within the year, with the European manufacturer getting 343 contracts later the previous month, in contrast with 690 for its Chicago based competitor as of November 7. The order also trumps outdid a 2015 deal for 250 single aisle jets at a price range of $27 billion by Indian budget carrier IndiGo. The two companies are not related.

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