Boeing To Sell ... Airbus?
Boeing may soon be looking for buyers for long-range passenger jets built by arch-rival Airbus under a rare trade-in deal with China's third largest airline that underscores all-out competition between the planemakers.
The U.S. planemaker has agreed to buy half of China Eastern's fleet of 10 Airbus A340 jets as part of a dollar 6 billion deal to sell 20 Boeing 777s to the airline, the Shanghai carrier said in a stock exchange filing on Monday.
Airbus has itself agreed to take back the other half of China Eastern's A340 fleet as part of a separate deal to sell 15 A330 jets, but faces likely delays in getting the deal done due to a row between China and Europe over emissions.
The two deals lift a veil on an obscure corner of the jetliner industry, where planes are traded in like used cars. Just like car dealerships, the world's dominant aircraft manufacturers sometimes offer to take back their old models when trying to persuade airlines to upgrade to the latest models, in an industry with dollar 100 billion in annual new sales. But experts agree it is unusual for aircraft to cross over the barrier separating Airbus and Boeing in their combative duopoly, and when they do it stokes up emotions on both sides. "It sometimes happens but it is not their preferred route at all," said Karl Bruenjes, managing director of UK-based RPK Capital Management, a specialist in second-hand aircraft. The deal echoes a move by Boeing to buy A340s from Singapore Airlines in the mid-1990s including some still in assembly. Back then, the aim was to support a blockbuster sale of 777s. When delivery came there was a brief spat over whether Airbus would support the A340s, according to people familiar with the deal. The subsequent trading spawned a joke inside Boeing headquarters that Boeing had placed more A340s than Airbus that year -- a source of irritation for Airbus that may be repeated if Boeing quickly sells the jets it plans to buy this time. Airbus halted production of the slow-selling A340 last year.
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