British Airways orders 24 Boeing jets, 12 A380s

The big order announced Thursday by British Airways for 24 Boeing 787 Dreamliners and 12 Airbus A380 superjumbo jets continued the amazing sales run of Boeing's new midsize airliner while giving Airbus fresh hope that its giant flagship jet can be a big success, too.

Yet what was missing from the order, worth about $8.2 billion at list prices (about half of that to Boeing), raised intriguing questions.

British Airways (BA) decided against the passenger version of the 747-8, the newest, largest variant of Boeing's venerable jumbo jet, which had earlier been rejected by both Qantas and Singapore Airlines.

Does Boeing's jumbo have a future as a passenger jet? Boeing Commercial Airplanes CEO Scott Carson said Thursday he still believes it does.

And BA Chief Executive Willie Walsh deferred for 18 months a decision on choosing a large twin-engined jet to replace the remaining 37 of its 747s, setting up a crucial competition for that order between Boeing's 777-300ER and Airbus' proposed new A350-1000.

What can Boeing do in the next 18 months to improve the 777 — right now the most efficient wide-body jet in service — so it can beat out an all-new, all-composite plane from Airbus? Carson said there's a plan.

Boeing made a big pitch to BA for the 747-8 but failed to get the hoped-for blue-ribbon order.

The plane maker has orders for five VIP versions of the jet, plus 65 orders for the freighter version. But so far it has just one airline customer, Lufthansa, for the passenger version.

Speaking to reporters after a lunchtime speech Thursday to the Seattle Chamber of Commerce, Carson curtly expressed certainty that another passenger 747-8 order will come.

But he conceded that order won't come this year.

As to the 777's future, he said that BA had deferred the decision only because Airbus' A350 is not ready to be evaluated. In the next 18 months, he said, Boeing will constantly improve the 777, already "the best twin-aisle, long-haul airplane in the world."

"We've showed [British Airways] and other operators that constant innovation path," Carson said. "Other operators are ready to make commitments against it. BA will be ready when they are ready to make a decision."

"We're very comfortable with where we are," he added.

In a conference call, BA's Walsh made clear that it's not just a matter of waiting for the detailed Airbus A350 specifications. He also wants those Boeing improvements to the 777.

"We're down to looking for greater clarity from both Boeing and Airbus," he said. "There's more work to be done on that."

The 777 versus A350 competition is shaping up to be a nail-biter.

With its order for the superjumbo, BA became the first new customer for the A380 in two years.

Discussing the BA order in London, Walsh responded to the pressure upon airlines in Europe to show their green credentials.

He described the 787 and the A380 as setting "the gold standard when it comes to environmental performance" and said that was a key factor in the decision.

The fuel efficiency and reduced emissions of both jets are increasingly big selling points.

Walsh said the A380s will also give significant per-seat operating cost savings over the 747s they will replace. And the 787s will give even greater savings compared with the 767s they'll supercede.

Both types of new aircraft will be delivered between 2010 and 2014, and BA said it had also taken options for a further seven Airbus superjumbos and 18 of Boeing's Dreamliners.

The airline will use the Dreamliners to open up new routes and increase the frequency of flights on existing ones.

The Dreamliner breaks new ground with a fuselage made of lightweight carbon composite, and is due to enter service next year. Sales stood at 710 before the BA order, making it already the fastest-selling wide-body plane in aviation history.

BA will use the Airbus superjumbo to maximize use of its limited takeoff slots at London's crowded Heathrow Airport on high-density routes to Hong Kong, Singapore, South Africa and the West Coast of the United States.

The A380 order, which ended decades of loyalty to Boeing's 747 jumbo, was welcomed by Tony Woodley, leader of Britain's biggest labor union, Unite. The union has thousands of members at the airline, at Airbus and at Rolls-Royce, which will make the engines for the A380s and the 787s.

"It's an excellent boost for UK manufacturing, with Airbus and Rolls-Royce plants benefiting," Woodley said. "This order will secure many thousands of jobs."

But Walsh denied the company had experienced political pressure to buy the Airbus superjumbo, the wings and engines of which are to be built in Britain.

"There was absolutely none," he told reporters. "There was no contact, be it formal or informal. The decision was made in the best interest of British Airways. In the engines, the choice of Rolls-Royce was because British is best."

The A380 is the biggest airliner in production, and its first delivery, due next month to Singapore Airlines, comes after wiring troubles triggered a costly two-year delay and management upheaval at Airbus.

BA took delivery of its first jumbo on April 22, 1970, becoming just the fifth airline to get one.

Analysts said BA had probably received significant discounts as Boeing and Airbus battled for the high-profile orders.

"With the A380 likely to have been heavily discounted, and a reasonable discount on 24 787s also applied, we'd estimate the real value of the order at around 3 billion pounds ($6 billion)," said analyst Andrew Fitchie at Collins Stewart.

Material from Reuters was included in this report.