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British Airways Approves 31-Plane Deal With Boeing

From Reuters

British Airways ordered 31 Boeing airliners on Friday, ending an intense battle between the Seattle plane manufacturer and the European Airbus consortium for a package totaling $1.8 billion.

A spokesman for British Airways PLC said it had signed a memorandum of understanding with Boeing Co. for 24 short-haul 737s, six medium-range 767-300s and one short- to medium-range Boeing 757.

The British carrier also reserved options on 11 more 737s, one more 757 and six more 737s and would take up at least nine of them, he said.

The total value of the package of 1.02 billion pounds included the cost of the options, spare parts and spare engines, he said.

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Commercial Decision

BA chose the Boeing 737, whose seat capacity ranges between 105 and 145, over the 146-seat Airbus 320.

“Airbus presented us with a very attractive proposal but . . . the greater flexibility of the Boeing option, compatibility with our existing fleet and its competitive economics weighed heavily in favor of the Boeing 737, 757 and 767 package,” the British Airways spokesman said.

“The decision has been made on purely commercial grounds and will be in the best interests of our customers, our shareholders and our staff,” he said.

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British Airways was under pressure from the Conservative government to place its order with the European Airbus Consortium in which British Aerospace has a 20% stake.

Aviation industry analysts widely regarded the order as a major coup for Boeing over Airbus, a four-nation European consortium based in Toulouse, France, which has been lobbying hard to sell British Airways its A320s.

They said the order was also significant because it could influence other airlines. The six Boeing 767s and one 757 will be fitted with Rolls-Royce engines. The British engine maker said in a separate statement that its part in the deal was worth $323 million (185 million pounds) .

The 767s will join a fleet of 11 of the airliners that British Airways has already ordered and which are due for delivery beginning in late 1989. The first of the new 737s is due to enter service in late 1991.

$25 Billion in Orders

British Airways said it planned to take the aircraft on extendable operating leases.

“A purchase contract will be signed in due course, by which time British Airways intends to have obtained commitments for finance,” a BA statement said.

The airline said the new order did not affect its existing fleet of A320s, of which three were in service and another seven were on order.

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Boeing has so far this year received orders for more than 500 planes, valued at $25 billion.


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