Aeromexico Said to Near Deal for 70 Jets Andrea Rothman and Jose Enrique Arrioja - Bloomberg News
go to original July 9, 2012

Grupo Aeromexico SAB is close to the purchase of about 70 mainly single-aisle aircraft, in what would be the biggest purchase yet by Mexico’s largest airline, three people familiar with the talks said.

The carrier is considering Airbus SAS’s A320neo and some A350 wide-body jets, as well as Boeing Co. (BA)’s competing 737 Max and 787-9 Dreamliner, said one of the people, who asked not be identified because the talks are private. Boeing has the upper hand after Commercial Airplanes Chief Executive Officer Ray Conner sent a sales team to Mexico to secure the order, two of the people said.
 

Boeing and Airbus are coming to this year’s Farnborough air show, which starts tomorrow, with more fuel-efficient versions of their best-selling single-aisle planes, after Boeing responded to the success of the A320neo last year at the Paris expo. Aeromexico sold shares to the public last year, and the carrier has arranged financing to expand its fleet.

Spokesmen for Airbus, based in Toulouse in France, and for Chicago-based Boeing declined to comment. Calls and e-mails to the Aeromexico’s investor relations offices in Mexico City seeking comment weren’t immediately returned.

Negotiations are continuing, and probably won’t be completed in time for Farnborough, one of the people said. Aeromexico would consider splitting the order between the two manufacturers, the person said.
Boeing Dominance

An order of 70 aircraft would be valued at about $6.66 billion, based on the $95.2 million price tag of the 737 MAX 8. Customers typically buy airliners at a discount. The 787-8 has a list price of $193.5 million.

Aeromexico reported first-quarter net income of 135 million pesos in April, on sales of 9.2 billion pesos. The company has received $171 million in financing from the Export-Import Bank to finance three 737s, it said last month.

Winning Aeromexico as a customer would let Airbus pry open Boeing’s hold on the carrier’s fleet. The company operates Boeing 737s as well as 767 and 777 wide-body jets, according to its website. Aeromexico also has smaller Embraer SA (EMBR3) ERJ-145 and E190 jets.

Boeing has switched executives at its commercial aircraft unit, with former sales chief Ray Conner taking over from Jim Albaugh last month in a surprise management overhaul.

To contact the reporters on this story: Andrea Rothman in London at aerothman@bloomberg.net; Jose Enrique Arrioja in Mexico City at jarrioja@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Ed Dufner at edufner@bloomberg.net

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