Good news for Airbus

By Thomas Lifson

After a terrible spell of bad news, Airbus announced the first firm order for its A350XWB wide body airliner, not due for delivery until 2014 at the earliest.

Finnair today signed a firm contract for eleven A350XWBs as well as seven additional long-range aircraft (a mix of A340-300s and A330s). It is the first airline to convert its order for nine of the initial A350, placed in December 2005, into the new A350XWB, and to simultaneously increase the number of aircraft ordered.

"We are particularly honoured by this mark of confidence from Finnair, one of Europe's major airlines. It is an endorsement of the new A350XWB programme. Throughout 2006, Finnair regularly expressed its faith in the product as well as in the Airbus team, and we are extremely pleased to come to this agreement today," Airbus Chief Operating Officer Customers, John Leahy said." I am confident the A350XWB will deliver on its promises and that it will meet Finnair's requirements in terms of passenger and cargo traffic growth towards Asia and the Far East."

This breaks a dry spell for Airbus wide body orders, and gains in significance because Finnair will be replacing MD 11 wide bodies manufactured by McDonnell-Douglas, later merged in Boeing. MD-11s are being retired from airline service by airlines around the world, so their replacement is not a surprise.

Finnair is a well respected airline, but hardly a major player in the industry. Still, Airbus needs good news, and that this is, although there is no indication of the price, down payment, or any discounts or other concessionary terms. A cynic might wonder if Finnair made a canny deal, recognizing the desperate need of Airbus for good press as French elections loom and the company's poor performance has become a political issue. The A 340 is being dropped by Air Canada, as we noted yesterday, for its poor economics, strengthening the hypothesis that an exceptionally good deal was on offer.