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UPDATE 2-United Airlines places $10 bln plane order

Published 12/08/2009, 09:29 AM
Updated 12/08/2009, 09:33 AM

* United orders 25 Boeing 787s and 25 Airbus A350s

* Planes to cut fuel costs and emissions by a third

* $10 billion deal is bright spot in depressed aero market

(Recasts after United statement)

By Kyle Peterson and Tim Hepher

CHICAGO/PARIS, Dec 8 (Reuters) - United Airlines placed a $10 billion-plus order for 50 wide-bodied jetliners divided between Airbus and Boeing on Tuesday, in a bid to slash fuel costs and emissions by a third on some routes from 2016.

The order is part of a request for up to 150 airliners of various sizes from the UAL Corp subsidiary that marks one of the biggest aircraft deals since the start of the recession, as well as a bounce in U.S. plane investment after years of industry restructuring.

The airline said it had ordered 25 787 Dreamliners from Boeing Co and the same number of A350 planes from its European rival Airbus, part of EADS, following a six-month contest.

It also took out purchase rights for another 50 similar aircraft and said it would use the new fleet to begin replacing its Boeing 747 and 767 planes between 2016 and 2019.

Airbus sales chief John Leahy toasted the order from an airline that shares common roots with Boeing and has always flown long-distance planes made by the U.S. planemaker.

United so far only uses Airbus planes for its short-haul and medium-haul fleet.

"We are very pleasedwith this order because it establishes that large carriers that clearly have a Boeing bias can introduce 25 A350s and very easily and efficiently fly them side by side with their Boeing fleet," Leahy said in an interview.

Amid lower plane orders due to the recession, the deal could kickstart a replacement cycle for less efficient planes, he said.

LOWER EMISSIONS

Industry sources said United had ordered 25 A350-900s and 25 Boeing 787-8s -- variants which make the combined deal worth $10.1 billion at list prices. The Airbus part of that is worth $6 billion but Leahy said United had won an unspecified discount, as is common in the airline industry.

The Boeing 787 Dreamliner and Airbus A350 together make up the next generation of lightweight composite-built jets being developed by the world's two large airliner manufacturers.

They are designed to address a promising market for aircraft built with tough but lightweight materials to save fuel and carrying 200 to 300 passengers over long distances on two engines.

Planemakers see a market for thousands of such aircraft once the airline industry recovers from recession.

"United estimates it will reduce its fuel costs and carbon emissions from the 50 aircraft by about 33 percent," it said in a statement.

It indicated it had not yet decided whether to choose Rolls-Royce Group Plc or General Electric Co engines for the 787s. Rolls is sole engine supplier on the A350.

The Boeing part of the order will be a confidence boost to the 787 Dreamliner project, coming weeks ahead of its first maiden flight which has been overshadowed by teething troubles.

Boeing's 787 is nearing the end of its development phase after delays, while Airbus will start building the A350 next year and United is due to start getting A350s from 2016.

Leahy said he did not expect the United deal to be fully formalised until early next year, meaning it is unlikely to bring Airbus closer to its goal of 300 sales in 2009, compared with 225 at the end of November.

But he said he was "working on the 300 target" and had other deals in the pipeline.

Boeing does not give a target for orders but has booked 204 plane sales so far this year. It has also received 93 cancellations compared with 28 cancelled orders at Airbus.

Separately Ireland's Ryanair Holdings Plc said it was likely to shelve plans to buy 200 Boeing aircraft because the U.S. plane maker wants to change delivery conditions. (Writing by Tim Hepher; Editing by Marcel Michelson and David Holmes)

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