Airbus Expects to Get Boeing Customer to Switch to A320neo

Airbus SAS may announce its first order for the A320neo this month from an airline that operates Boeing Co. (BA) 737s, signaling the European company is making inroads into rival territory with its upgraded single-aisle jet.

All orders or commitments for the jet, to enter service from late 2015, have so far been from leasing firms, which buy a broad mix of planes, or airlines that buy from Airbus. Winning an operator of Boeing’s “Next Generation” 737s would illustrate Airbus’s ability to pull business from customers not firmly loyal to the Toulouse, France-based company.

“We’re talking to a few customers who now fly the 737NG about the Neo and I’d be very surprised if we don’t have at least one announcement from an airline currently operating the Boeing NG,” Christopher Buckley, Airbus’s executive vice president for Europe, Asia and Pacific, said in an interview in Singapore today.

Since it began offering airlines the A320 series planes equipped with new engines, Airbus has already won 332 orders and commitments and expects to complete the Paris Air show later this month with more than 500 orders for the series, Buckley said at the annual general meeting of the International Air Transport Association.

Boeing declined to comment today. The Chicago-based company has said it prefers to develop an all-new single-aisle model that would be available by 2020, though it may offer a new engine for the 737 in the middle of the decade as an interim step if the new plane would take longer than expected.

‘Cost of Switching’

“There’s a very high cost of switching” a fleet from one manufacturer’s jets to another, Boeing Commercial Airplanes President Jim Albaugh said in a May 24 presentation in Seattle. “I really don’t think that we’re going to see too many customers really think about switching to a different type of airplane any time soon.”

The Boeing 737 NG, which stands for Next Generation, entered service in 2000, replacing older variants known as 737 Classics. The A320 and the 737 are the most commonly used aircraft by airlines, and they generate the bulk of orders for their manufacturers.

Airbus is also optimistic about additional orders for the double-decker A380, the world’s largest passenger jet, the executive said. The planemaker won SkyMark of Japan, which ordered four, and South Korea’s Asiana Airlines (020560), which ordered six, as new customers for the A380 this year. Both carriers will use the planes to challenge leaders in their home markets.

‘Good Start’

“After that good start, we’re now optimistic we will be able to add a new customer, our third for the year, hopefully in the next couple of months,” Buckley said. “We think this will be a good year for the A380, and I think the feedback both from our current customers and from the passengers as well remains fantastic.”

Over the longer term, Airbus expects to win customers for the superjumbo in the U.S. market, he said. So far sales have been largely in Asia and Europe.

“I don’t think it will happen tomorrow, but we’ve seen some interest,” Buckley said.

To contact the reporters on this story: Andrea Rothman in Paris at aerothman@bloomberg.net; Liza Tan in Singapore at ltan104@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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