LONDON/PARIS (Reuters) - Airbus EAD.PA is in advanced talks to complete a $10 billion order for at least 100 planes from British low-cost airline easyJet (EZJ.L), sources familiar with the matter said on Thursday.
EasyJet has entered negotiations with the European planemaker as preferred supplier to buy around 100 of its re-engined A320neo jets, with as many again in options, dealing a blow to its U.S. rival Boeing (BA.N) which had hoped to undo the airline’s defection to its European rival over a decade ago, the sources said.
“Airbus is the front-runner but the commercial evaluation is still happening,” said a source close to the talks.
An easyJet spokesman declined to comment on the status of talks with Airbus and Boeing. Both manufacturers declined to comment.
The two planemakers have been pitching commercial terms to Europe’s second-largest budget carrier in recent weeks after easyJet completed the technical evaluation of its favored jets, the re-engined Airbus A320neo and Boeing 737 MAX.
Barring surprises, the complex deal is not expected to be finalized in time to be announced at next week’s Paris Airshow.
In 2002 Airbus won a deal to supply easyJet with 120 A319s, plus options for a further 120, after a bitter competition that became a factor in the world’s largest trade dispute, involving reciprocal transatlantic claims of illegal aircraft subsidies.
One of the sources said the airline’s latest deal would “not be dissimilar in size”.
EasyJet began operations in 1995 with Boeing aircraft but shifted to Airbus in 2002.
Such a large deal would represent a class 1 transaction for easyJet, meaning it would require shareholder approval.
Analysts believe easyJet’s chief executive Carolyn McCall has a good chance of winning approval for a deal from shareholders despite opposition from Stelios Haji-Ioannou, who founded the airline in 1995 and remains its largest shareholder with a 37 percent stake.
Stelios has said he believes buying new planes would destroy shareholder value and that the money would be better spent on improving returns to investors, through dividends or share buybacks.
However she has already pleased shareholders with a doubling of the annual dividend and profits since taking the helm in July 2010.
She now wants to replace easyJet’s ageing 156-seat A319s, which make up around three quarters of its fleet, with more cost effective and fuel-efficient 180-seat jets.
Editing by Greg Mahlich