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Qatar Airways Buys 80 Airbus A350 Jets for $16 Billion

Qatar Airways extended a much-needed boost to Airbus on Wednesday, ordering another 20 A350s to become the European jetmaker's largest customer for the wide-body jet with a total order of 80 planes with a list price of $16 billion (11.92 billion euros).

The agreement was signed by Qatar Airways President Akbar Al Baker beside new French President Nicolas Sarkozy and Qatari Sheik Hamad bin Khalifa Al Thani. The A350 is Airbus' challenger to Boeing's 787 long-range, mid-sized aircraft.

"It's one of Airbus' biggest ever orders," said Airbus Chief Executive Louis Gallois, also present at the signing.

He said that other orders could be in the pipeline.

The Qatar Airways agreement for 20 A350-800s, 40 A350-900s and 20 A350-1000s, as with most large orders, would likely come with deep discounts from the listing price. The agreement replaces an earlier one for 60 A350s signed in 2005.

Airbus has been losing customers for mid-sized jets to U.S. rival Boeing and was forced last year to launch a costly redesign of the planned A350 to compete with Boeing's 777 and 787 Dreamliner, due to enter service in 2008.

The European planemaker has bet heavily on future demand for superjumbos to serve increasingly congested airports worldwide. Yet its large A380 craft has been beset by legal, technical and managerial problems. Two years of accumulated delays to the 555-seater A380 have wiped more than 5 billion euros ($6.6 billion) off Airbus' profit forecasts for 2006-2010. It also has also been suffering from a falling dollar the currency in which it sells its planes.

The commitment for 20 extra planes brings Airbus' total orders for the A350 to 268. Of those, there are firm orders for 71 A350-800 and 33 A350-900. Airbus is forecasting the first commercial delivery of the A350 will be in 2013.

Wednesday's agreement comes after a report Tuesday in German daily Sueddeutsche Zeitung that carriers including Qatar Airways but also Singapore Airlines, Emirates and the International Lease Finance were pressing Airbus for changes to the A350's fuselage design. Airbus denied it planned any changes.

"Airbus is offering the A350 and continues to offer it with the composite panels which we believe are the best solution," Airbus spokeswoman Barbara Kracht said in response to the report Tuesday.

Airbus claims its A350, made from carbon fiber wings and composites, will be lighter per seat and more economical than existing crafts.

The 787's first test plane is scheduled to be ready in July, with the plane entering commercial service next May. To date, Boeing has racked up 568 orders for the 787, which it says will be 20% more fuel-efficient than comparable jets.

Gallois said Wednesday that Qatar has expressed an interest in investing in Airbus parent EADS, but there have been no specific discussions about the state becoming a shareholder. Sarkozy has vowed his government will seek new investors for EADS, seeking changes to the shareholder pact as existing stakeholders Lagardere and DaimlerChrysler seek to reduce their holdings.

The French state owns 15% of EADS, while Paris-based Lagardere owns 7.5%. Their combined stake is balanced by German holdings by Stuttgart-based DaimlerChrysler and a consortium of private and state-run investors.

Qatar, in the Persian Gulf, sits atop the world's largest field of natural gas. Natural gas exports are financing a rapid expansion of the capital, Doha, and bankrolling the state-owned airline. A tourism boom in the Middle East is contributing to the region's air traffic growth.

Qatar and EADS will sign a contract next month in Doha for radar coverage across the Qatari region, according to David Martinon, a spokesman for Sarkozy.

Shares in European Aeronautic Defence & Space fell 1.5% to 22.90 euros ($30.73) in Paris.

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