June 19, 2019 / 9:22 AM / a month ago

UPDATE 2-Airbus grabs China Airlines narrow-body jet order

(Adds Boeing freighter deal)

LE BOURGET, France, June 19 (Reuters) - Airbus unveiled an aircraft deal with Taiwan's China Airlines on Wednesday, snatching the carrier's medium-haul fleet renewal from Boeing a day after its U.S. rival made a shock entry into the single-aisle fleet of British Airways owner IAG.

The European planemaker said China Airlines had signed a preliminary deal to buy 11 A321neo aircraft, worth about $1.4 billion at list prices, while leasing another 14.

Although much smaller than the IAG letter of intent for 200 Boeing 737 MAX announced on Tuesday, the China Airlines deal signals intensified competition in Asia where Boeing predicts 40 percent of jets will be delivered over the next 20 years.

The same airline however said it intended to order up to six Boeing 777 freighters to modernize its cargo fleet as it launches operations from Taipei to North America and Europe.

Airlines can rarely be persuaded to jump ship to rival suppliers because of the costs of training and parts, but this week's Paris Airshow has witnessed two such announcements as sold-out planemakers mount incursions to continue their growth.

In a further competitive twist, Boeing announced on Tuesday it would take over the supply of spare parts for the remaining Airbus A320 fleet at British Airways.

China Airlines announced the leasing part of the deal in May when Reuters reported it would also pave the way for the Taiwan carrier to switch its medium-haul fleet to the Airbus A320neo.

The rare deal to replace older 737s took years to complete and was drafted before the 737 MAX was engulfed by a crisis involving two crashes and a worldwide grounding, sources said. (Reporting by Tim Hepher, Editing by Mark Potter and David Evans)

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