UPDATE 2-Airbus woos Udvar-Hazy with revamped A320

Fri Jan 28, 2011 11:28am EST

* Morgan Stanley predicts 500-1,000 A320neo sales by June

* Airbus says figure overly optimistic

* Adds expects to sell several hundred over same period

(Adds Udvar-Hazy comments, background)

TOULOUSE, France, Jan 28 (Reuters) - Airbus said it was in preliminary talks with leasing magnate Steven Udvar-Hazy over its A320neo passenger jet, but moved to quash a forecast of up to 1,000 short-term sales of the revamped model.

Hazy, considered a pioneer after co-founding what become the world's largest aircraft leasing firm in 1973, has expressed doubts about Airbus's plan to revamp its best-selling A320 model with new engines from 2016.

Hazy, and Airbus sales chief John Leahy, were sharing a podium on Friday as the former took delivery of his first Airbus plane since relaunching his career with a new leasing company, Air Lease Corp, last year.

The sleek black-painted passenger jet, decorated in honour of New Zealand's All Blacks rugby team, was delivered to its operator Air New Zealand (AIR.NZ) at Airbus headquarters.

"We did take a little bit of time this morning to have a few discussions with Steve and his team about the neo but you have to remember they have just placed an order for 51 aircraft," Leahy said.

"I don't know if they will look at the neo this week, but I am sure they will be looking at it (some time)."

Hazy sold his original company, International Lease Finance Corp, to insurer AIG (AIG.N) for $1.3 billion in 1990, while staying on to run the business.

Last year he stepped down in an apparent dispute over the way ILFC was being financed in the wake of a U.S. government bailout of AIG, and launched Air Lease Corp at the Farnborough air show with orders for 100 planes, including 51 from Airbus.

As chief of ILFC, Hazy was considered so successful he could tell Airbus and Boeing how to build their planes, and he remains an influential figure in the aviation industry. An order from him would be considered a boost for the neo.

On Friday, Hazy stressed the advantages of the current model, the one he has leased to Air New Zealand.

"The A320 has been a wonderful performer... a cost-effective airplane and a real workhorse. So this is chapter two for us," he said.

Though Hazy declined to confirm publicly whether he would order the revamped model, which costs about $6 million more than the basic A320, he told Reuters before the event that he was reluctant despite Airbus' promise the neo will boast 15 percent better fuel burn when it is ready in 2016.

"It is not just the fuel burn, you have to look at maintenance costs, capital costs, spare parts," he said.

"There are a lot of other costs associated with introducing a different version of the A320 so (we) are not 100 percent aligned on this issue."

Leahy is upbeat on orders for the A320neo but was forced to dampen expectations after an analyst was quoted as predicting as many as 1,000 sales by June, outstripping his own target.

Morgan Stanley was quoted on Thursday as estimating that the European planemaker would sell 500-1,000 A320s by the Paris air show in June. Leahy called the figure "overly optimistic" and reiterated he expected to sell "several hundred" over the same period.

(Reporting by Tim Hepher; Editing by James Regan and David Hulmes)

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Comments (1)
FleetBuzz wrote:
There’s little doubt the neo will sell (as will the 737) and SUH will eventually place an order. He cant afford for ALC not to.

Jan 29, 2011 7:31am EST  --  Report as abuse
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