ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, November 7, 1996 TAG: 9611070032
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: ARLINGTON
SOURCE: Bloomberg Business News
EUROPEAN MANUFACTURER AIRBUS has won a $5 billion order for 120 planes, with an option for 280 more.
USAir Group Inc. said it will buy 120 jetliners valued at $5 billion from Airbus Industrie, giving the European company another big foothold in the North American aircraft market.
Airbus beat rival offers from industry leader Boeing Co. and McDonnell Douglas Corp. to win the order, its first from USAir. The intense competition makes it likely that the nation's sixth-largest carrier will pay far less than list price for the planes.
``They got a good price,'' said Airbus spokesman Dave Venz. ``You're bound to when you buy this many airplanes.'' The order could grow in coming years because USAir took options for 280 more Airbus planes. If those become firm orders, the sales would be worth about $18 billion, making it Airbus's largest order ever, and one of the biggest in aviation history.
A Boeing spokeswoman said Boeing is sorry to lose the order, though she said USAir is in talks now about a purchase of Boeing's new 777-200, which holds 300-375 passengers. ``We're going to try to sell them some bigger planes,'' said Liz Verdier of Boeing. The firm orders and options are for Airbus's smaller A319, A320 and A321 models, which will be configured to hold 122 to 168 passengers, Airbus and USAir said. Neither party would discuss exactly how much USAir would pay for the planes, deliveries of which are to begin in 1997.
Some of the new planes could find their way onto Roanoke routes, but it's too early to say where the planes will be going, USAir spokesman Paul Turk said.
The new planes are scheduled to replace existing planes owned by USAir made by a variety of manufacturers, including Boeing 737-200s, Turk said. USAir's fleet currently numbers 390 planes of all sizes.
Common stock of Arlington, Va.-based USAir rose $1.25 cents a share to $19.371/2 in trading Wednesday of 1.8 million shares, more than triple the average daily volume over the last three months. Airbus, a joint venture of four European aerospace companies, isn't publicly traded.
USAir's order comes as U.S. airlines join the worldwide rush to buy new aircraft. Seattle-based Boeing has been deluged with orders as Asian carriers boost capacity in a growing economy and U.S. airlines use record profits to replace aging equipment.
Airbus, too, has won several large orders, including an important one from UAL Corp.'s United Airlines in August. United agreed then to buy 24 Airbus A319 planes worth $900 million.
USAir's purchase brings the total firm orders for Airbus aircraft to 408 so far this year, compared with just 106 in 1995.
USAir said it is counting on the Airbus planes to help it further cut operating costs, which it has struggled for years to contain. The airline has slashed more than $500 million by eliminating unprofitable routes and upgrading computers, in turn rebounding from six years of losses that exceeded $3.2 billion.
Cost savings will result from the plane's fuel efficiency, lower maintenance costs, and the economies of standardizing the fleet, Turk said.
LENGTH: Medium: 66 lines ILLUSTRATION: PHOTO: AP. This artist's rendering shows Airbus jetliners A319,by CNBtop, and A321 flying USAir colors. color.