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Airbus Seen Bagging Germania Order as Economic Worries Cloud Industry

July 10, 2016, 2:19 PM UTC
An Airbus A320 airplane takes off from a runway at Ronald Reagan Washington National Airport in Arlington, Virginia, September 23, 2013. AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
Photograph by Saul Loeb — AFP/Getty Images

German airline Germania is close to placing an order with European planemaker Airbus for around 25 A320-family jets, two industry sources said on Sunday, as aviation chiefs gathered for an industry summit clouded by economic worries.

The privately-held German carrier operates a mixed fleet of Airbus and Boeing jets but has said it aims to harmonise its fleet by switching to all-Airbus aircraft when it takes older Boeing 737-700s out of service.

The potential order—which could be worth over $2.5 billion at list prices—will disappoint Boeing (BA), which tried to wrestle back its former customer on the eve of Britain’s Farnborough Airshow, the sources said, asking not to be named.

Germania officials could not immediately be reached for comment.

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An Airbus spokesman said, “We do not comment on confidential talks which may or may not be happening with our customers.”

Germania currently operates a medium-haul fleet of 10 Boeing 737-700s, as well as eight Airbus A319s and four A321s.

Swiss affiliate Germania operates three Airbus jets, according to latest statistics from the planemaker.

The airline first ordered Airbus jets in 2010, having previously operated mainly Boeing airplanes.

Chief executive Karsten Balke told Reuters last year it still had purchase rights for further Airbus aircraft and would use them “when we get the right price”.

Berlin-based Germania focuses on Europe, North Africa and the Middle East and recently announced a co-operation with Spanish carrier Air Europa.

If confirmed, the order could be announced at the upcoming July 11-17 Farnborough Airshow, the sources said.

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However, the showcase for order announcements, which alternates each year with the Paris Airshow, is expected to be quieter this year as airlines await direction from a faltering economy after several years of strong demand.

Among other potential deals, Airbus was said on the eve of the show to be close to securing an order worth some $3 billion for 8-10 A350 jets from Virgin Atlantic.

But the same airline looks set to cancel a long-standing order for six Airbus A380 superjumbos, industry sources said.

Boeing is expected to firm up at least part of a deal for up to 20 747-8 freighters from Russia’s Volga Dnepr, boosting its declining jumbo jet programme, and could announce a new Asian customer for its 737 MAX 200 jet aimed at low-cost carriers.

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The U.S. company announced a preliminary deal with Volga Dnepr last year.

Boeing is meanwhile expected to relaunch the smallest version of its 737 MAX series by adding more seats to make it more economical for airlines, after negotiating the change with buyers including Southwest Airlines.

Airbus is expected to talk up the recent sales success of its A321neo, the largest member of its medium-haul family, as Norwegian Air considers upgrading about 30 of the 100 A320neo it has on order to the larger 185-seat A321neo.