Airbus Trying to Break Boeing's Monopoly at American Airlines

July 12, 2011
Report: Airline dangling $6 billion in preferential financing.

Airbus is trying to break Boeing's monopoly at American Airlines, which is considering an order of 250 passenger planes, The Wall Street Journal reported late Monday.

Citing unnamed people familiar with industry proposals, the newspaper said Airbus had assembled a team of lenders and leasing firms to help it dangle almost $6 billion in preferential financing before American Airlines.

Airbus's offer has a catalog value of almost $23 billion, but that is being heavily discounted, the report said.

The unit of European Aeronautics Defense & Space Co. is offering American 130 of the current-generation A320s and 130 of the more fuel-efficient A320neos, the paper noted.

In July 2010, American Airlines exercised options for an additional 35 Boeing 737-800s as part of its fleet-renewal plan. However, Airbus is making a serious push for future business from AA.
However, Boeing wants to keep Airbus out of American hangars, The Journal said. Jim Albaugh, chief executive of Boeing's commercial airplane unit, was expected to meet with American officials on Monday. Boeing is offering 737-800s and 737-900 extended-range planes, but the price and financing terms are unclear, the paper said. "Right now, Boeing is in a tough situation," The Journal quoted Adam Pilarski, senior vice president at aviation consulting firm Avitas, as saying. "They need to try to convince the airline to give them a few more months to announce their intentions for the 737." Copyright Agence France-Presse, 2011
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