Airbus breaks into partnership with American jet order

The record-large order placed by the AMR Corp unit gives Airbus a stronger foothold in US markets. The deal also rapidly refreshes American Airlines’ ageing fleet with more fuel-efficient planes to better compete with US rivals.

For Boeing, the order is a bittersweet victory, marking the end of an exclusivity deal with American Airlines. The US plane maker salvaged its portion of the order by offering to put a new engine in its best-selling 737, retreating from a more ambitious plan to completely redesign the plane.

“My initial reaction is, ‘wow, what a big deal!’ ” said Alex Hamilton, managing director of EarlyBirdCapital. “I think that speaks to the underlying robustness of the cycle, if you will, just because it’s the largest order in aircraft history.

“I think it’s a marginal victory for Boeing,” Mr Hamilton said. “From a marketing standpoint it’s a big deal for Airbus.”

The deal, which calls for American to buy 200 Boeing 737s and 260 Airbus A320s, comes after tense haggling as American Airlines played the world’s two largest plane makers off against each other to win concessions.

American Airlines will take delivery of 100 aircraft from Boeing’s current 737NG family starting in 2013, including three 737-800 options that had been exercised as of July 1.

American Airlines also intends to order 100 of Boeing’s expected new version of the 737NG, featuring CFM International’s Leap-X engine. The Leap-X relies mostly on modern materials rather than structural changes to save fuel. CFM International is a joint venture between General Electric and Safran.

The carrier is willing to become the launch customer for the upgraded 737, which needs approval by Boeing’s directors.