United set for US$14bn Airbus A350 order

Airbus is on the verge of securing an order for 45 of its A350-900 wide-body jetliners, a critical win after a run of deferrals by U.S. carriers, according to people familiar with the matter.

The order will likely be placed by United Continental to convert an earlier $12.6 billion deal for 35 of the bigger -1000 variant, based on current list prices.

The deal could be announced as soon as Wednesday and would be valued at $14 billion before discounts, according to the people, who asked not to be identified as the talks are private.

Airbus declined to comment on discussions with customers. United, which is seeking to renew its fleet of aging Boeing 747 and 777 wide-body planes, was unavailable to comment outside normal business hours.

The expanded order comes after American Airlines and Delta Air Lines both put off deliveries of the marquee Airbus jetliner amid concern about the risk of operating larger planes.

Chicago-based United has said it’s reviewing its A350 order after indefinitely postponing delivery of four jets originally due for delivery this year. Retaining United as a wide-body customer is crucial for Toulouse, France-based Airbus as it seeks to expand twin-aisle sales in Boeing’s home market.

Capacity squeeze

The deal would lift Airbus’s backlog for the 325-seat A350-900 to 673 aircraft, while narrowing the order book for the 366-seat -1000 to 177, based on the planemaker’s latest order and delivery tallies.

That underscores the pressure on bigger wide-body jets as carriers around the world rein in capacity expansion to ease pressure on fares.

United is the second-largest customer of the largest A350 model behind Qatar Airways Ltd., which recently scrapped orders for four -900 jets due to supplier delays.

Delta said in May it would defer 10 orders for the jet and instead take a stretched version of Airbus’s A320 single-aisle workhorse. Meanwhile, American has postponed deliveries of 22 jets.

United’s fleet strategy has been in flux since President Scott Kirby joined the company last year from American Airlines, where he had helped negotiate a purchase of the Airbus jetliner.

The original deal pre-dates the carrier’s 2010 merger with Continental Airlines and marked United’s first order for an Airbus widebody.

The next-generation jet is made of carbon-composite panel and is critical to Airbus’s efforts to compete with Chicago-based Boeing’s smaller 787 Dreamliner and the bigger 777X, the first twin-engine plane built to haul more than 400 passengers.