US Air close on Boeing vs Airbus decision: CFO
Wed Jun 13, 2:33 PM ET
US Airways Group (NYSE:LCC - news) may reach a decision this month on whether to proceed with an order for 20 Airbus wide-body planes or switch to Boeing Co. (NYSE:BA - news) aircraft, the carrier's chief financial officer said on Wednesday
The airline, which ordered the Airbus A350s in 2005, is also considering Boeing's 787 Dreamliner. If US Airways abandons its A350 order, it would mark a significant defeat for Airbus, which is owned by EADS (EAD.PA) in Europe.
Boeing last year won back the title of biggest-selling planemaker from Airbus, due largely to sales of its 787.
US Airways, the No. 7 U.S. airline, in terms of revenue, is still negotiating with both companies, Derek Kerr said on a Webcast of a transportation conference sponsored by Merrill Lynch.
"The hold up is to make sure we get the best deal," Kerr said.
In the past, US Airways has been one of Airbus' most loyal U.S. customers, with the airline's mainline fleet consisting primarily of Airbus planes.
Kerr also discussed what he called a flattening revenue environment for airlines as they face increased capacity -- the number of seats for sale -- and higher fuel prices.
Aggressive competition from low-cost airlines like Southwest Airlines (NYSE:LUV - news) and JetBlue Airways (Nasdaq:JBLU - news) has battered so-called "legacy" carriers in recent years.
Carriers cut capacity in 2006 and managed to raise fares accordingly. But a gradual increase in capacity in 2007 has eroded the ability of airlines to impose lasting fare hikes.
As a result of the increased capacity and rising fuel costs, industry experts have warned of softening domestic revenue.
To cut excess capacity, Kerr said the airline remains open to any merger prospects. However, with no major U.S. airlines in bankruptcy and relative economic success in the airline industry, Kerr said he does not expect consolidation soon.
US Airways issued a hostile bid for Delta Air Lines (NYSE:DAL - news) last year. The offer was rejected in January.
Shares of US Airways fell 52 cents, or 1.78 percent at $28.67 on the New York Stock Exchange at mid-afternoon.
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