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GE’s CFM Said to Near $2.6 Billion Engine Sale to EasyJet

A General Electric Co. (GE) joint venture is nearing an order from U.K. discount airline EasyJet Plc (EZJ) for 200 jet engines valued at $2.6 billion, two people familiar with the talks said, dealing a blow to competitor Pratt & Whitney.

The Leap-1A engines from CFM International would power 100 Airbus Group NV (AIR) A320neos that EasyJet agreed to buy in 2013, said the people, who asked not to be identified because details are private. They said the deal may be announced as soon as next week at the Farnborough International Airshow in England.

The deal would mark another setback for United Technologies Corp. (UTX)’s Pratt, which vies with CFM to supply engines for the latest model in Airbus’s top-selling A320 jet family. American Airlines Group Inc. is poised to place a $2.6 billion order with CFM to outfit the carrier’s Neos, two people familiar with those plans said this week.

Airbus introduced the improved A320 in 2010, spurring Boeing Co. to upgrade its 737. Neo contracts are important because the planes use Pratt or CFM power plants. Boeing’s new 737 Max is offered only with engines from CFM, a venture between Fairfield, Connecticut-based GE and France’s Safran SA. (SAF)

A CFM spokeswoman, Jamie Jewell, declined to comment on the status of talks with EasyJet.

The airline hasn’t made a decision on an engine provider, and the offerings from each manufacturer are “suitable,” said Paul Moore, a spokesman for the Luton, England-based company. “We’ve made it very clear that we are evaluating both the CFM and Pratt & Whitney engines.”

EasyJet, Europe’s second-largest low-fare carrier, agreed in June 2013 to buy 135 Airbus planes, split between 35 current-generation A320s and 100 Neos. The $13 billion deal, which included options for 100 more Neos, reignited a clash with founder and largest shareholder Stelios Haji-Ioannou, who called it “another huge capital expenditure.”

The carrier said at the time it expected to take delivery of the Neos from 2017 to 2022. The Leap-1A engine, set to enter service in 2016, has a list price of $13 million.

To contact the reporters on this story: Richard Clough in New York at rclough9@bloomberg.net; Andrea Rothman in Toulouse at aerothman@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Ed Dufner at edufner@bloomberg.net Ed Dufner

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