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Boeing, Airbus Split United Airlines Jet Order

Tue, 12/08/2009 - 3:47am
Joshua Freed, AP Airlines Writer

CHICAGO — United Airlines on Tuesday said it would buy its first new jets since 1998, splitting an order for 50 planes between Airbus and Boeing Co.

United said it ordered 25 of Boeing's long-awaited 787 widebody jetliners and 25 of the Airbus A350. Delivery is expected between 2016 and 2019, around the same time the airline will retire Boeing 747 and 767 aircraft.

At list prices the planes would be worth roughly $10 billion, with about $4 billion for Boeing's 787-8 and about $6 billion for the Airbus plane. United President John Tague said they got a discount, which is common for jet orders.

"We felt that we had a significant opportunity by timing the order with the backdrop of the current economic environment," he said.

United has not yet worked out financing for the planes, although Tague said the manufacturers had agreed to provide loans if needed.

John Leahy, Airbus chief operating officer, said the deal is valued at about $6 billion at list prices. He said the deal is a letter-of-intent, which Airbus expects to convert to a firm order in a month or two. Once the order is official it will bring Airbus' total orders for the A350 to 530, Leahy said.

"We're not surprised by the decision to split the order" Leahy said. He said it was noteworthy because it was the first time United has ever ordered non-Boeing wide-body jets.

United, the third-biggest airline in the U.S., said this summer it was seeking dueling proposals from Boeing and Airbus to replace the biggest jets that make up nearly half of its fleet.

The orders come with future rights for 50 of each aircraft, United said.

The airline said the new jets will reduce fuel burn and environmental impact, while expanding service to more international locations.

United Airlines is a subsidiary of UAL Corp., based in Chicago.

AP Business Writer Greg Keller in Paris contributed to this report.

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