Boeing Nabs a $30 Billion Deal, but Airbus Isn't Far Behind

The battle for airplane supremacy rages on with Boeing (NYSE: BA  ) nabbing a deal worth $30 billion, and rival European Aeronautical Defense and Space's (NASDAQOTH: EADSY  ) Airbus, receiving an order worth $11.5 billion. Boeing's order was for its much anticipated, but troubled, 787 Dreamliner, and Airbus' order was for its 135 A320neos. Here's what you need to know. 

Fight!
Boeing's Dreamliner has had its issues, and is just coming off a four-month grounding because of lithium-ion-battery issues. But some airlines seem to be letting bygones be bygones. GE Capital Services, British Airways, Air Lease, United Airlines, and Singapore Airlines all placed orders for the 787-10 version of the Dreamliner, showing that they're putting money on the Dreamliner's issues becoming a thing of the past.  

However, EasyJet (LSE: EZJ  ) decided to go with Boeing's rival, and placed an order for 135 planes from Airbus -- 100 of which will be the A320neos. EasyJet's decision came after 18 months of comparing Boeing's planes to Airbus'. What cinched the deal, according to EasyJet's CEO, Carolyn McCal, was a "substantial discount" for the A320 planes.  

The winner is...
Both Boeing and Airbus have touted their planes as being the best of the best in an attempt to be the top dog for commercial aircraft production -- and there's good reason. With an estimated $100 billion-a-year jet market, potential profits from aircraft orders are substantial.  

And while both Airbus and Boeing received lucrative orders, Airbus' win over Boeing for the EasyJet order may be especially hard for Boeing to swallow. EasyJet is one of the world's largest budget airlines, and Boeing used to be it's main supplier. However, a decade ago, Airbus beat out Boeing to become the main supplier for EasyJet, and Boeing has been trying to regain its position since.  

What to watch for
The showdown between Boeing and Airbus is far from over; they've been battling it out for years, and that's unlikely to change. But what makes this round especially exciting is that both Boeing and Airbus are touting next-generation planes, and clearly have high stakes in the game. Whose next-gen plane is superior is still undecided, but considering the potential profit to both companies, this is something investors should closely monitor.

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  • Report this Comment On June 19, 2013, at 11:42 AM, foxxydrummer wrote:

    I sincerely doubt that EasyJet was comparing the 787 Dreamliner to the A320's. Dreamliners are long-haul twin aisle aircraft, whereas A320's are short to mid-range single aisle aircraft. They may have been comparing the A320's to Boeing's 737nextgen. EasyJet is comparable to Southwest Airlines, flying short haul routes throughout Europe.

  • Report this Comment On June 19, 2013, at 12:10 PM, don06709 wrote:

    the reporter must not be a seasoned aerospace industry reporter. First, mistake. the statement that only some airlines are not troubled with the 787 dreamliners. Well, despite all the problems the 787 had in the last two years, they still have 800+ orders for the plane that havent been cancelled, so clearly most airlines are not troubled with the plane.

    Second, as pointed out by another reader, Easy jet selecting A320neo over the Dreamliner. what !!!!!!!!! . The A320neo goes against the 737 max not the dreamliner. Aren't editors supposed to go over articles. Big mistake most likely by a rookie.

  • Report this Comment On June 19, 2013, at 3:22 PM, TMFKSpence wrote:

    Hi foxxydrummer and don06709, you are correct. The sentence should have read, "EasyJet's decision came after 18 months of comparing Boeing's planes to Airbus'." I've pinged my editors to make the fix. My sincere apologies! :)

    TMFKSpence

  • Report this Comment On June 20, 2013, at 3:38 AM, quasimodo007 wrote:

    Bet AIRBUs CEO won't be GETTING a huge bonuses and Pay like boeing CEO $37Millions dollars Bonuses and Tax Free Paid perks .

    the evil Anti Union gop congress will give boeing Billions Dollars TAX break even when they Outsource US JOBS the work overseas.

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