A1FlyBoy
Well-known member
- Joined
- Jan 11, 2002
- Posts
- 682
PARIS, July 15 (Reuters) - FedEx Corp (NYSE:FDX - News) put its faith in the largest-ever commercial plane on Monday when it became the seventh firm to sign up for the Airbus A380 with an order for 10 of the superjumbo jets.
The contract, which includes options on 10 more, is a key win in the European planemaker's war with Boeing Co (NYSE:BA - News) to secure the custom of cargo operators accustomed to using Boeing's 747 for intercontinental cargo.
The FedEx deal, which takes the A380 order backlog to 95, would be worth around $5 billion at list prices if all options became firm orders.
But analysts think Airbus has been offering hefty discounts to lure airlines to its behemoth amid a morose sector climate.
Boeing dropped out of the race to build a new large commercial jet when it scrapped plans for a longer version of the 747. It is now focusing on a smaller, faster Sonic Cruiser, a plane whose feasibility is still being examined.
The A380-800F cargo planes would be delivered to FedEx between 2008 and 2011.
French President Jacques Chirac will inaugurate the new A380 final assembly site near Toulouse, France on Tuesday.
The A380 has bolstered Airbus's production backlog during the aviation downturn of the past year as airlines looked to a hoped-for upturn in traffic by the time the 555-seat jet reaches the market in 2006.
FedEx becomes the second U.S. customer Airbus has stolen from under Boeing's nose, after plane-leasing company International Lease Finance Corp, part of insurance group AIG (NYSE:AIG - News), signed up for 10 of the planes.
The other carriers which have already decided big is beautiful are Air France (Paris:AIRF.PA - News), Emirates , Lufthansa (XETRA:LHAG.DE - News), Qantas (Australia:QAN.AX - News), Singapore Airlines (SES:SIAL.SI - News) and Virgin Atlantic .
Planemakers are always keen to secure the loyalty of first-time customers for a new plane, because initial orders normally lead to more, and widen the base of customers for lucrative services and spare parts.
Questions have been raised over whether Airbus will be able to pay for A380 development given the cash crisis at many of its airline customers, and indeed whether the potential market for the A380 justifies the outlay.
But the company has said it does not expect a slump in aircraft output this year or next and is banking on cost cutting to free up more cash for investment down the line.
The contract, which includes options on 10 more, is a key win in the European planemaker's war with Boeing Co (NYSE:BA - News) to secure the custom of cargo operators accustomed to using Boeing's 747 for intercontinental cargo.
The FedEx deal, which takes the A380 order backlog to 95, would be worth around $5 billion at list prices if all options became firm orders.
But analysts think Airbus has been offering hefty discounts to lure airlines to its behemoth amid a morose sector climate.
Boeing dropped out of the race to build a new large commercial jet when it scrapped plans for a longer version of the 747. It is now focusing on a smaller, faster Sonic Cruiser, a plane whose feasibility is still being examined.
The A380-800F cargo planes would be delivered to FedEx between 2008 and 2011.
French President Jacques Chirac will inaugurate the new A380 final assembly site near Toulouse, France on Tuesday.
The A380 has bolstered Airbus's production backlog during the aviation downturn of the past year as airlines looked to a hoped-for upturn in traffic by the time the 555-seat jet reaches the market in 2006.
FedEx becomes the second U.S. customer Airbus has stolen from under Boeing's nose, after plane-leasing company International Lease Finance Corp, part of insurance group AIG (NYSE:AIG - News), signed up for 10 of the planes.
The other carriers which have already decided big is beautiful are Air France (Paris:AIRF.PA - News), Emirates , Lufthansa (XETRA:LHAG.DE - News), Qantas (Australia:QAN.AX - News), Singapore Airlines (SES:SIAL.SI - News) and Virgin Atlantic .
Planemakers are always keen to secure the loyalty of first-time customers for a new plane, because initial orders normally lead to more, and widen the base of customers for lucrative services and spare parts.
Questions have been raised over whether Airbus will be able to pay for A380 development given the cash crisis at many of its airline customers, and indeed whether the potential market for the A380 justifies the outlay.
But the company has said it does not expect a slump in aircraft output this year or next and is banking on cost cutting to free up more cash for investment down the line.