US Airways dumps $3.2 billion Airbus order, goes with Boeing


Boeing Co. (NYSE:BA) continues to pile up business in the wake of Airbus' A350 woes. Today the Times of London reported that U.S. Airways Group (NYSE:LLC) is canceling its order for 20 of the A350s in favor of 20-30 of Boeing's new 787 Dreamliners. The Airbus order had been valued at $3.7 billion, while the Boeing purchase is estimated at $3.2-$4.9 billion.

Just yesterday, Virgin Airlines announced they intend to purchase as many as 43 Dreamliners, $8 billion worth, to replace their Airbus fleet.

This despite Airbus dropping the price of its A350 by 50% in a desperate attempt to stop the bleeding. Boeing is thought to be knocking about a third off the price of its Dreamliner.

What Airbus can't match is delivery date. With a two-year delays blamed on wiring and other problems with the new A380, the A350s aren't expected to go into operation until 2013-14, while the first Dreamliner is expected to enter service in May of 2008.

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