Lufthansa Group places $3 billion order with Airbus
The Supervisory Board of Deutsche Lufthansa AG has approved the purchase of 27 short- and medium-haul aircraft. Purchase options for 24 Airbus A320neo and three A321neo will be converted into firm orders. With this decision, the Lufthansa Group is reacting to the positive market and earnings development and thus ensuring the necessary fleet size in the coming years. The total investment of this order amounts to a list price of about $3 billion. This increases the total number of A320neo and A321neo orders to 149 for the Group, 13 of them are already operating with Lufthansa.
The A320neo and A321neo (short for “New Engine Option”) are scheduled for delivery in 2023 and 2024. Ten of the 27 new aircraft are intended for SWISS, the remaining aircraft will be in service by other flight operations within the Aviation Group. One part of the order will be equipped with Pratt & Whitney engines (PW1100G), the other with LEAP-1A engines from CFM International. This means that both engine types will continue to be available to the Lufthansa Group in roughly equal proportions for the “Neo” family.
The innovative engine technologies developed by Pratt & Whitney and CFM International as well as the aerodynamic wingtips (sharklets) with which the aircraft are equipped reduce fuel consumption significantly by up to 20 percent per seat kilometer. As all Lufthansa A320 Family aircraft, the A320neo and A321neo are serially equipped with noise-reducing vortex generators. An A320neo taking off has a noise carpet that is around 50 percent smaller than that of other aircraft of this type.
Airbus needs every purchase it can get to stay afloat
Earlier this year, Airbus revealed some troubling news. The company had commenced negotiations with Emirates airlines over an order of up to 36 A380 aircraft in a deal worth approximately $16 billion. Airbus explained that were this deal to fail, the company would have to shut down operations.
Last week, a report by Bloomberg revealed that talks between Emirates and Airbus have stalled. This is due to negotiations between Emirates and the A380’s engine supplier Rolls-Royce failing to amount to anything solid. Emirates is not pleased with the fuel burn of Rolls-Royce’s engines, nor their price.
“The companies have missed a deadline to select the engines, possibly delaying first delivery in 2020 – and even threatening the deal outright,” Bloomberg noted.
Earlier this week, Kuwait Airways revealed on their Twitter account that they had just secured a deal with Airbus after 5 months of negotiation for 8 A330-800neo airliners. The deal is valued at approximately “$2 billion based on the jet’s list price of $259.9 million,” Forbes reported.
The airline will start receiving the planes between March 2019 and 2026.
Kuwait Airways and Lufthansa’s orders could help Airbus stay clear of the red until the Emirates deal works out. It’s too early to write Airbus off just yet.