BOEING GETS SMALL SHARE OF UK DEAL.

Byline: Peter Robison Bloomberg News

British Airways Plc. will buy as many as 220 planes worth $13 billion from Airbus Industrie and Boeing Co. in a sweeping revamp of its fleet, the UK airline's biggest order ever and its first from the European partnership.

Boeing, until now the dominant supplier to Europe's largest airline, won firm orders for just 16 of its 777 long-range planes and options for 16 more. Airbus will supply as many as 188 of its A320 short-haul jets, replacing older Boeing 737s in the United Kingdom airline's European network. It got 59 firm orders.

The order is the biggest for Airbus from a non-U.S. airline and shows the inroads the 25-year-old partnership has made against Boeing, which trails its European rival for orders at the end of this year's first half. In an additional blow to the world's largest aircraft maker, British Airways canceled seven options for Boeing's jumbo 747s as it shifts toward smaller planes.

``It's not optimal for Boeing - jumbo jets are its most profitable by a wide margin,'' said Nick Heymann, an analyst with Prudential Securities.

British Airways said it won't buy any more 747s for its long-range routes for at least the next decade, focusing instead on smaller aircraft like the 777 and the 767. Airline stocks have dropped in recent weeks on concern that recessions in Asia could end the industry's four-year boom. Airlines are slashing services there and are using the planes elsewhere, leading to capacity growth that outpaces demand.

Some forecasts call for worldwide traffic growth of 3 percent this year, slowing from annual growth of 8 percent earlier this decade. Even with the latest order, British Airways said its own growth in capacity will match expected growth in air travel.

``We hate to lose any campaign,'' said Boeing spokesman Mark Hooper. ``But we're very happy about the 777 order and British Airways' indication that they're going to stick with 767s, 777s and 747-400s.''

Some analysts said the loss of the order is a positive sign that the U.S. Aircraft maker is backing away from an intense price-cutting war with Airbus, owned by manufacturers in France, Germany, Britain and Spain.

In an indication of the scale of discounts British Airways won, it said its net cost for the 75 firm orders will be about 1.4 billion pounds ($2.3 billion) compared with a list price of 3 billion pounds. The net figure also reflects the proceeds British Airways expects to get from selling older planes and the benefit of replacing the 747 orders.

CAPTION(S):

2 Photos

PHOTO (1--2--Color) Above, British Prime Minister Tony Blair, left, shakes hands with British Airways head Bob Ayling beneath an Airbus A320 in Toulouse, France. At left, technicians prepare to tow an Airbus A320 at Toulouse Airport.

Tim Ockenden/Associated Press