NYTimes.com Article: Boeing and Airbus Intensify Their Sales Pitches to AirTran

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Boeing and Airbus Intensify Their Sales Pitches to AirTran

June 27, 2003
By EDWARD WONG






Sales executives from Airbus and Boeing have been meeting
with AirTran Airways this week to try to land what would be
one of the largest aircraft orders this year, Airbus and
AirTran officials said yesterday.

The executives have been meeting at AirTran's headquarters
in Orlando, Fla. The order, for 100 planes, is valued at
several billion dollars and will be announced this summer,
said Tad Hutcheson, AirTran's marketing director. It would
be the biggest order placed so far this year in terms of
the number of planes. AirTran intends to take delivery of
the first aircraft next year, Mr. Hutcheson said.

AirTran, a low-cost carrier and one of the few profitable
airlines in the United States, called for proposals in
March for 100 aircraft. Airbus and Boeing began wooing the
company immediately, and talks have intensified in recent
weeks. AirTran is considering planes from either Boeing's
737 family or the Airbus A320 family - exactly the types of
jets that have proved to be popular with growing low-cost
airlines.

"We've got a team talking to the airline this week," said
Mary Anne Greczyn, an Airbus spokeswoman. "Orlando is a
very busy place this week. Everybody who's got a horse in
this race is down there."

Ms. Greczyn added that sales representatives from the major
engine manufacturers were also in Orlando talking to
AirTran. Engines are the most expensive pieces of equipment
on a plane.

Airbus has been sending sales executives from its North
American headquarters in Herndon, Va. The company is based
in Toulouse, France.

As for the progress of negotiations, Mr. Hutcheson simply
said, "It's a buyer's market out there."

The order is critical for both airplane makers. Boeing,
based in Chicago, is depending on it to show the industry
that it can compete favorably against Airbus, especially
among low-cost airlines. Airbus, meanwhile, is seeking to
increase further its lead over Boeing in terms of numbers
of orders landed this year.

A Boeing spokeswoman declined to comment on the
negotiations.

AirTran uses a fleet of 64 Boeing 717's and 8 DC-9's. It is
phasing out the DC-9's, used on shorter routes, and is
taking delivery of nine more 717's before the end of the
year.

Last year, Airbus scored a big victory against Boeing when
it landed an order for 120 A319's from easyJet, the
profitable low-cost airline based near London. That was the
biggest commercial plane order placed last year, and the
deal also included an option for 120 more planes. JetBlue
Airways announced in April that it was ordering 65 more
A320's.

On June 16, Emirates Airline signed a contract with Airbus
at the Paris Air Show for 41 planes, including 21 A380's,
the giant 550-seat aircraft that Airbus will roll into
service three years from now. The Emirates deal was valued
at $12.5 billion and generated a lot of talk at the air
show. Airbus and Boeing executives at the show shied away
from talking much about the pending AirTran order, despite
their usual air of braggadocio at the show about potential
orders.

Mr. Hutcheson said AirTran intended to place an initial
order for either Boeing 737-700's or Airbus A319's. But the
company could ask for options to upgrade those jets to
larger ones from the same fleet families to give it more
flexibility. That means the order could later be changed to
include the larger 737-800's and 737-900's, or the A320's
and A321's.

Depending on the plane type, the number of seats could
range from about 120 to 180.

Mr. Hutcheson said the new aircraft would allow AirTran to
add more transcontinental routes. AirTran's Boeing 717's
cannot fly from the airline's hub in Atlanta to the West
Coast. This month, AirTran began service between Los
Angeles and Atlanta by leasing two A320's from Ryan
International Airlines, based in Wichita, Kan.

Raymond E. Neidl, an analyst at Blaylock & Partners, wrote
in an investors' note yesterday that "multiple expansion is
warranted" in AirTran's near future and that he expected
the airline to gain market share and remain profitable at
least until 2005.

http://www.nytimes.com/2003/06/27/business/27AIR.html?ex=1057718209&ei=1&en=3134310c58686211


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