Braniff Will Buy 50 of Europe’s Airbuses : Up to $3.5-Billion Sale Includes Options for Another 50; Fleet’s Size Could Triple
Braniff Inc. today announced a bold move to climb into the airline big leagues, saying that it will acquire 50 of Europe’s Airbus Industrie A320 planes and that it has options to get another 50 in a deal valued at up to $3.5 billion.
The deal represents one of the largest single orders for jets produced by Airbus, the European aircraft consortium that has emerged as a major competitor against the U.S. giants of the industry, Boeing Co. and McDonnell Douglas Corp.
It also could nearly triple the fleet size of Braniff, a regional carrier with 53 jets that has endured three changes of ownership, a Chapter 11 bankruptcy reorganization, a major recapitalization and the transfer of its major operations to Kansas City from Dallas in the last six years. The airline has vowed to become a more competitive force in the industry.
“Today’s announcement, I think, takes us a giant step forward toward making that goal a reality,” William McGee, Braniff’s chairman, told a news conference in New York.
Engines for the planes, which are included in the price, will be supplied by IAE International Aero Engines, a consortium of U.S., British, West German, Japanese and Italian engine makers that is based in East Hartford, Conn. The U.S. partner is Pratt & Whitney Aircraft of East Hartford.
The deal will be worth the $3.5 billion if Braniff exercises its options to acquire all 100 planes. Airbus will sell the first 42 planes to a financing group, which will in turn lease them to Braniff. Airbus will have to make its own financing arrangements for the other eight in the first group of 50.
The members of the financing group are GPA Group of Shannon, Ireland, an aircraft leasing company; Airbus, and the engine supplier, IAE.
McGee confirmed reports that the deal includes 16 planes originally intended for Pan Am World Airways, which recently decided to scrap an order of A320s in exchange for a payment of $115 million.
The Airbus A320 is a 150-seat, highly efficient aircraft used widely to replace aging jets. It was unclear how Braniff’s acquisition of these planes would affect previously disclosed plans to acquire 23 Boeing 737s from AMR Corp., parent of American Airlines.