Mexico's VivaAerobus set to confirm Airbus switch: sources

PARIS Thu Oct 17, 2013 11:49am EDT

A VivaAerobus Boeing 737-300 aircraft taxis on the tarmac at the Benito Juarez International Airport in Mexico City July 28, 2012. REUTERS/Bernardo Montoya

A VivaAerobus Boeing 737-300 aircraft taxis on the tarmac at the Benito Juarez International Airport in Mexico City July 28, 2012.

Credit: Reuters/Bernardo Montoya

PARIS (Reuters) - Mexico's VivaAerobus is set to confirm a roughly $4 billion order for 40 Airbus EAD.PA A320-family jets after rejecting bids from current supplier Boeing (BA.N), industry sources said.

The defection to a new supplier, first reported by Reuters in June, follows a bitterly fought contest as the Mexican low-cost carrier becomes the latest to compare the newest fuel-saving models offered by both planemakers.

Airbus, Boeing and VivaAerobus all declined to comment, but the airline said it had scheduled a news conference for Monday.

The deal is also expected to mark a breakthrough for United Technologies (UTX.N) unit Pratt & Whitney, whose engines compete with GE/Safran (GE.N)(SAF.PA) venture CFM to power A320 jets.

The arrival of a new generation of jet engines boasting double-digit percentage gains in fuel efficiency prompted both Airbus and Boeing to revamp their medium-haul, narrowbody models and triggered a worldwide battle for market share.

But analysts say it is rare for an airline to switch suppliers, partly because of the cost of re-training pilots.

The airline uses a fleet of CFM-powered 737-300s, an earlier generation of Boeing's (BA.N) most-sold passenger plane.

VivaAerobus said in June it was studying proposals from planemakers about the possible purchase of new aircraft.

Industry sources said the airline had made the selection in the summer, leaving contract details to be worked out before a final announcement. A breakdown of the order was not available but each revamped Airbus A320neo, which is the most popular variant, is worth $100 million at catalogue prices.

(Reporting by Tim Hepher, Tomas Sarmiento; Editing by James Regan and David Evans)

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