* World's largest tour operator takes option on 90 more
* Picks 737 MAX model to make its fleet more fuel-efficient
By Rhys Jones
LONDON, May 31 British travel firm TUI Travel
agreed to buy 60 mid-range Boeing jets with an option for 90
more, moving to make its fleet more fuel-efficient and
delivering the U.S. planemaker a big contract win over European
The world's largest tour operator, which owns six European
airlines including Britain's Thomson Airways, said on Friday the
initial order of Boeing 737 MAX planes was secured at a
"significant discount" to the list price of $6.09 billion.
The planes, to be powered by CFM LEAP-1B engines, are
scheduled for delivery between January 2018 and March 2023, TUI
It said such a large deal would represent a class 1
transaction, meaning it would require shareholder approval.
"TUI Travel have 59 leases on planes expiring over the next
three years so the fact they are looking to buy these planes
shows the strength of the company," said Oriel Securities
analyst Jeffrey Harwood, who added that cutting its fuel bill
was a big motivation for the group.
Several European carriers have seen profits battered by high
fuel costs - which now account for around half of airlines'
operating expenditure - in recent years.
Boeing has said the 737 MAX, which competes with Airbus'
A320neo, will burn 13 percent less fuel than current
Reuters reported earlier this year that TUI Travel was close
to sealing a deal for 60 narrow-body airliners.
Boeing is also competing with Airbus to supply British
low-cost airline easyJet with new planes.
EasyJet is edging towards a firm order for at least 100
A320neo or 737 MAX planes jets worth around $10 billion, with as
many again in options, sources close to the deal said, adding
that the European planemaker was the favourite.
EasyJet, which operates an all-Airbus fleet of 213 aircraft,
ideally wants to remain a single-manufacturer fleet, but is
considering moving entirely to Boeing planes.
TUI Travel, whose airlines use 141 aircraft, received the
first of 13 long-haul Boeing 787 Dreamliners planes on Friday.
"Being able to offer our customers the most advanced,
comfortable aircraft, whether they are travelling with us to
short or long-haul destinations, while reducing our
environmental impact, will only strengthen our position," said
TUI Travel Chief Executive Peter Long.
Shares in TUI Travel, which is 56 percent owned by Germany's
TUI AG, were 1.4 percent down at 357.9 pence by 0910
GMT, valuing the company at around 4 billion pounds.