December 13, 2017 / 7:10 PM / a month ago

Delta may place order for 100 Airbus A321neo jets: sources

PARIS/NEW YORK (Reuters) - Delta Air Lines (DAL.N) looked close on Wednesday to placing an order for 100 Airbus (AIR.PA) A321neo jets in a boost for the European planemaker as it tries to narrow a 2017 order gap against Boeing (BA.N), two people familiar with the matter said.

The preliminary selection, first reported by CNN, follows a fierce competition and is subject to approval at a board meeting later on Wednesday, which could still alter or delay the decision, the people said.

Such a deal would be worth $12.7 billion at list prices, but would typically involve steep discounts.

Delta and both planemakers declined comment.

The A321neo has a significant lead in market share over equivalent Boeing narrowbody models, but faces potential competition from a new mid-market jet being studied by Boeing and for which the U.S. firm may start seeking offers next year.

But the endorsement from the second largest U.S. airline by passenger traffic, known as one of the industry’s pickiest buyers, brings respite to Airbus after a year marked by a slowdown in sales and internal management tensions.

It is also a boost for United Technologies subsidiary Pratt & Whitney (UTX.N), which is likely to win an engine contract to power the A321neo aircraft, industry sources said.

Airbus has been in discussions with Pratt & Whitney to ensure that enough engines are available to support the pledge to supply 100 jets to Delta as the U.S. engine maker works through recent industrial problems, they added.

    Pratt & Whitney, which competes with French-American venture CFM International to power the A320 family, declined to comment.

    Delta’s decision to side with Airbus jets over the Boeing model came as no surprise to people in the industry, who have for months watched as tensions continued to escalate between the two U.S.-based companies.

    Their relationship began to strain in October when Boeing successfully lobbied the U.S. Commerce Department to propose trade duties of nearly 300 percent on Delta’s order of CSeries jets from rival planemaker Canada-based Bombardier Inc.

    Boeing had alleged that Bombardier received illegal subsidies from the Canadian government, allowing the planemaker to dump the 75 jets at “absurdly low” prices.

    “Boeing had a double disadvantage here. Political, over the trade complaint, and technical in that most of the market seems to be preferring the Airbus (model),” Teal Group analyst Richard Aboulafia said.

    Reporting by Tim Hepher in Paris and Alana Wise in New York; Editing by Leigh Thomas, David Evans and Susan Thomas

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