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Economy

US's Delta places Airbus order as planemaker's board meets

media Tom Enders, CEO of Airbus REUTERS/Fabian Bimmer

The US's Delta Air Lines has ordered 100 aircraft from Airbus with an option to buy 100 more, in a blow to the European plane-maker's American rival, Boeing. The announcement came as Airbus's board met amid rumours that its two top bosses would resign.

The order for 100 197-seater A321neo aircraft for Delta's narrowbody fleet is worth 12.7 billion dollars (10.7 billion euros) based on catalogue price, although buyers usually negotiate a discount on large orders.

"This is the right transaction at the right time for our customers, our employees and our shareholders," Delta CEO Ed Bastian said in a statement.

Deliveries will begin in 2020.

Airbus, which is based in the French city of Toulouse, opened a manufacturing plant in Mobile, Alabama, in 2015 to build single-aisle planes with an eye towards the US market.

"This purchase furthers our commitment to US aviation, a commitment that has never been stronger," said John Leahy, chief operating officer for customers at Airbus Commercial Aircraft.

The order is a blow to Boeing, which is locked in dispute with Delta over a separate airplane order by Delta and Canadian company Bombardier.

Boeing has argued those aircraft were underpriced due to illegal Canadian government subsidies to Bombardier.

Bombardier in October unveiled a production alliance with Airbus that granted the European company a stake in the Bombardier C-Series program.

Delta has said it will not pay for any US tariffs sought by the US government in response to Boeing complaints.

Fraud investigations in Europe

The order will have been some welcome good news for Airbus's board, which met Thursday as the company faced several prosecutions and rumours that its top bosses would resign.

Several press articles on Tuesday reported that German Tom Enders and his number two, Frenchman Fabrice Brégier, were about to quit their jobs.

Enders responded with a statement that the decision would not be taken "either by the French press, nor by the French government, nor by any government".

He is named in an Austrian investigation into the sale of Eurofighter planes to the government, which is also the subject of a German investigation, although prosecutors there say they have found "little proof of corruption".

The French and British fraud offices are also looking into Airbus in connection with financial irregularities that the company itself brought to the authorities' attention.

 

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