SEATTLE (Reuters) - American Airlines Group (AAL.O) is close to finalizing an order for 200 CFM International engines, worth $2.6 billion at list prices, to equip 100 Airbus Group NV (AIR.PA) A320neo jetliners that the airline has on firm order, according to three people familiar with the matter.
The deal between the world’s largest airline and CFM International, a joint venture between General Electric Aviation (GE.N) and Safran SA (SAF.PA) of France, marks a loss for United Technologies Corp’s (UTX.N) Pratt and Whitney unit, which makes the other engine offered on the A320neo.
The sources spoke on condition of anonymity because they were not authorized to discuss the deal publicly.
American Airlines, Airbus, CFM and Pratt declined to comment.
The CMF LEAP-1A engine for the Airbus A320neo is expected to be up to 15 percent more fuel efficient than the comparable CFM56 engine powering current A320s. The A320neo is due to enter service in the fourth quarter of 2015 and flight testing of the plane is due to start in September 2014, Airbus said.
The American order is significant in part because the carrier has options for additional A320neos. The orders are part of American’s landmark firm order for 460 Airbus and Boeing planes, placed in July 2011.
The 2011 American deal forced Boeing to follow Airbus’ strategy of putting new engines on the stalwart A320. Boeing revamped its best-selling 737 with new engines rather than waiting for a more ambitious redesign.
Boeing’s rival plane, the 737 MAX, offers only the CFM LEAP-1B engine. American has placed firm orders for 100 737 MAX jets and options for 60 more.
Reporting by Alwyn Scott; Editing by David Gregorio and Cynthia Osterman