Spirit Airlines close to agreeing major Airbus order -sources


U.S. budget carrier Spirit Airlines is close to agreeing a provisional deal to order as many as 100 single-aisle aircraft worth up to $12 billion at recent catalogue prices from Airbus, industry sources said.

Adds details, background

Oct 23 (Reuters) - U.S. budget carrier Spirit Airlines SAVE.N is close to agreeing a provisional deal to order as many as 100 single-aisle aircraft worth up to $12 billion at recent catalogue prices from Airbus AIR.PA, industry sources said.

Such a deal would be the first for the European planemaker since the United States imposed 10% tariffs on some of the planes it offers to U.S. carriers last week, part of a long-running transatlantic trade dispute over aircraft subsidies.

Airbus declined to comment. Spirit, which reports earnings later on Wednesday, did not respond to a request for comment.

A deal of that size would be worth up to $12 billion at the most recent 2018 Airbus list prices, but industry sources say such deals typically involve discounts of at least 50%.

In August, the Miramar, Florida-based airline said it was looking at both the Airbus single-aisle A321neo jet or a Boeing BA.N alternative to fuel its growth.

Spirit, founded in 1993, currently operates an all-Airbus fleet of 140 jets.

The ultra-low cost carrier relies on "unbundling" fares, offering a basic service at an attractive cost topped up by a raft of optional extra charges.

A deal for Boeing to break into Spirit would be seen as a breakthrough since low-cost carriers typically use only one model to save money on costs such as training. But if the deal is confirmed, Airbus may paint it as a morale boost amid the new tariffs.

"It proves tariffs don't work," a European source said.

Boeing has said the tariffs are needed to level what it regards as an unfair advantage for Airbus due to subsidies. Both planemakers have partially lost subsidy rulings and the European Union is expected to respond with its own tariffs next year.

Aircraft are typically ordered several years in advance, meaning any planes ordered now would only be covered by tariffs in the event of an extended transatlantic tariff war. Airbus jets assembled at a plant in Alabama are not currently included.

It was not immediately clear whether an order from Spirit would include any deal to offset the cost of any tariffs.

Spirit Chief Executive Ted Christie told a conference in August the airline saw benefits in continuing to operate a single fleet but that it would closely study the prices in any airplane offers.

(Reporting by Tim Hepher, Tracy Rucinski; editing by David Evans and Kirsten Donovan)

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