Costly sales blow for Airbus

Emirates, the biggest Arab airline, delayed a $4.2 billion Airbus order for 20 planes to give the European aircraft maker time to develop a better version of the jet, which is losing sales to Boeing's 777.

"They're delaying the planes for a few years," John Leahy, Airbus chief commercial officer, said in an interview Thursday at company headquarters in Toulouse, France.

Emirates President Tim Clark "deferred the order until the manufacturer comes back with clearer plans about an enhanced version of the plane," said an Emirates spokeswoman, who declined to be identified.

The plane, the four-engine A340-600, is being beaten by Boeing's two-engine 777-300, which is more fuel-efficient.

Even as that large Airbus wide-body jet order was thrown into doubt, Boeing quietly finalized a big wide-body deal with Australian carrier Qantas for 45 new 787s.

Emirates has firm orders for 12 of the Airbus A340s and options on eight more, which are the largest Airbus aircraft in service.

They were ordered in 2003, and the first delivery was due in June 2007.

With list prices of $200 million to $225 million per aircraft, the lost sales are costly to Airbus.

"They're in deep trouble," said Paul Nisbet, an analyst at JSA Research in Newport, R.I., who has a "buy" rating on Boeing stock. "Their wide-bodies are not competing well with the Boeing wide-bodies."

Airbus offers three variations on the A340 model: the A340- 300, which seats 295; the A340-600, which seats 380; and the A340-500, which seats 313 and flies 8,500 nautical miles, competing with Boeing's 777-200LR.

Boeing's 777-300ERs won 89 orders, while the 777-200LRs got 30.

"If for sure Emirates doesn't want to take the aircraft in a certain time frame, we will sell the aircraft somewhere else," Airbus Chief Executive Gustav Humbert said at a briefing Thursday in Toulouse.

Emirates is also talking to Airbus about its new A350 model and to Boeing about its new 787 jet.

Emirates said last month it could be interested in Boeing's model if the Chicago-based plane maker was willing to proceed with a larger 787, known informally as the 787-10. Boeing said earlier this week it plans to build such a plane.

The Qantas order that Boeing finalized this week was first announced in November.

It is worth $5.9 billion at list prices, though typically airlines get discounts estimated at about one-third. Deliveries are to start in 2008.

Qantas Chief Executive Geoff Dixon said in November the airline might eventually take as many as 100 of the new jets.

In another wide-body deal for Boeing, Chile's largest air carrier, Santiago-based LAN Airlines, said it will purchase three 767-300 airplanes for $270 million, according to a letter it sent Wednesday to the Santiago Stock Exchange.

LAN ordered six 767s in 2004 and six more in 2005. The three new ones will be delivered in 2007 and 2008.

With only 30 jets still on order at the end of February, 767 production in Everett has slowed to a crawl of just one per month and the line is threatened with closure.

Sales of the big-ticket, wide-body jets are more profitable than narrow-body sales.

With the Qantas addition, Boeing has booked orders for 55 wide-bodies in the first quarter.

A month ago, Airbus had booked four. It has not yet updated the figure for March.

Last year, Boeing trounced Airbus on wide-body sales, with 447 net orders to Airbus' 193. The 787 and 777 far outsold the A350 and A340.

The continuing Boeing dominance has shaken confidence in Airbus' midsize wide-body strategy among major customers.

Seattle Times aerospace reporter Dominic Gates contributed

to this report.