Although things have not been great for the airline industry as of late, they have started to slowly turn around. However, this turnaround time has been extremely slow for Airbus. So to hear that Airbus just recently signed its biggest deal ever is quite an amazing feat.
Airbus said, on Monday, that it has just landed its biggest order yet. This order came from Indonesia’s Lion Air. It’s said that this deal is worth some €18.4 billion. Airbus believes that this huge investment may even encourage other airlines to start placing large orders as well.
The deal between Airbus and Lion Air was signed by the CEOs of both companies. According to Airbus, this contract is for 234 planes. The signing of this contract took place in a ceremony at the French presidential palace. For those who don’t know, this is a place of great importance to the government, which shows the importance of this latest deal.
The French government hopes that this new deal might help to spur on the economy. Right now unemployment is over 10%, and it currently shows no sign of coming back down. Part of this new deal will actually see Airbus building these planes in France. It would involve some 5,000 workers to make these planes.
Although not all of the details of this contract were made public, it’s known that Lion Air will be buying some 169 A320 and 65 A321 jets. The first of these planes will be delivered sometime in 2014. It’s also said that most of these planes will be outfitted with new technology. This does include technology to help make them more fuel-efficient.
Of course, this is not the first time that Lion Air has made the news for this kind of announcement. In fact, Lion Air recently gave Boeing its largest-ever order. This deal saw the company order 230 planes. It’s odd that the company would give both Airbus and Boeing their biggest orders ever since these two plane manufacturers are rivals.
Although times have been hard for both Boeing and Airbus, they have managed to stick it out. Unfortunately, this wasn’t done by their own strength. In fact, both Airbus and Boeing receive a lot of support from their respective governments. In some cases, this support is financial. It must be nice knowing that “big brother” is watching out to make sure these companies stay afloat.
So why did the French government care if Airbus lands this big deal or not? This is because France is doing all it can to convince companies all over the world that it is a great area for manufacturing. The government would like to persuade companies to bring their factory jobs to France in order to help get down the unemployment rate.
The problem the French government has run into is the fact that manufacturing things in France is extremely expensive when compared to other countries around the world. This has a lot to do with extremely high labour costs. On top of that, companies say it’s too hard to fire French workers because of the unions. It’s easier to work in countries like Spain.