Airbus to revamp aviation’s A320 workhorse

Reuters: Airbus turned up the heat on Boeing Co and emerging competitors for its most popular aircraft by pledging to upgrade its A320 jetliner with state-of-the-art engines offering 15 percent fuel savings.

The world’s largest aircraft maker said on Wednesday it would invest just over 1 billion euros ($1.3 billion) in the “A320neo” project to improve efficiency and cut harmful emissions and noise. Now, the aviation world awaits word from rival Boeing on whether it will upgrade its competing 737 narrow-body.

“Boeing really needs to watch this,” said Richard Aboulafia, an aerospace analyst with the Teal Group. “They might have to play catch-up if they start losing customers.” The new Airbus planes, with upward-slanting wingtips, will look almost identical to existing aircraft but have larger and more efficient engines from either Pratt & Whitney, a unit of U.S. manufacturer United Technologies Corp, or CFM International, a joint venture between U.S.-based General Electric Co and French group Safran SA.

First delivery of the overhauled jet would come in 2016.

Shares in Airbus parent EADS rose 1.3 percent in Paris, while United Technologies shot up 4 percent and GE rose 3 percent amid a broader U.S. market rally. Boeing was also up 3 percent on the New York Stock Exchange.

The long-awaited Airbus decision, reported by Reuters on Tuesday, hits back at Canada’s Bombardier Inc, whose CSeries leads a field of newcomers aiming to challenge Airbus and Boeing for a market worth $1.7 trillion over 20 years.