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Airbus Roiled by Secret Boeing Order That Stole the Paris Show

June 20, 2019
The secret negotiations between Boeing and IAG led to the biggest surprise of the week-long show.

Airbus SE vowed to put up a fight to undo a $24 billion deal landed by rival Boeing Co. for 737 Max planes that proved to be the sales coup of this year’s Paris Air Show.

Speaking at a final press conference from Le Bourget airfield outside the French capital on Thursday, Airbus sales chief Christian Scherer said the European planemaker never received a request for proposals— a document that formally launches bidding for most major aircraft contracts⁠— from IAG SA, the owner of British Airways.

The secret negotiations between Boeing and IAG led to the biggest surprise of the week-long show: a letter of intent from the carrier to purchase 200 of the Max aircraft, a model that is grounded following two fatal crashes. IAG is currently an Airbus-only narrow-body customer and has said it plans to use the planes for its discount and leisure divisions, including Vueling and Level.

“We are taking the position that we would like to bid for this business,” Scherer told reporters. “IAG is a very good customer. Every one of these airlines are A320 operators. Our intent is to bid.”

The shock announcement came midway through the exhibition and helped Boeing clear some of the gloom surrounding the 737 Max by instilling a measure of confidence in its future.

The Boeing agreement was outlined as a letter of intent, meaning that negotiations over the details will need to be confirmed in the coming months. Airbus Chief Executive Officer Guillaume Faury said he’d like to find a way in before the deal develops into a final contract.

“We’d be very happy to compete when it comes to a tender for this large number of planes,” he said. “We are quite sure we will have an opportunity to apply. And make sure that in the end the best solution prevails for IAG, which is an important customer.”

In many ways, the U.S. planemaker couldn’t have found a better buyer than IAG to endorse the Max, whose future has been clouded as regulators demand fixes to make the plane safer. IAG has proven to be a savvy aircraft buyer and is led by a former 737 pilot, CEO Willie Walsh.

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