Northwest Airlines to Buy 50 Airbus Jets for $2 Billion

Northwest Airlines Corp. on Thursday said it has agreed to buy 50 Airbus Industrie A-319 jets valued at $2 billion, giving the European aircraft maker a much-needed victory in its battle for market share against Boeing Co.

Northwest signed a memorandum of understanding for the 125-seat planes and took options to buy 100 more. If all the options become orders, the sale would be valued at $6 billion. The planes will be delivered between 1999 and 2003.

The choice of Airbus wasn’t surprising, analysts said. As the manufacturer’s largest customer, St. Paul, Minn.-based Northwest already operates a fleet of 50 A-320s. It owns no Boeing 737s, which compete with the A-320 family.

Northwest shares fell $1.125 to close at $33.875 on Nasdaq.

The Northwest order brings to $3.5 billion the value of contracts Airbus has announced at the Paris Air Show. Boeing has announced orders at the show valued at about $450 million.

Keeping Northwest was crucial for Airbus because it’s lost some of the biggest U.S. airlines as potential customers. Since November, AMR Corp.’s American Airlines, Delta Air Lines Inc. and Continental Airlines Inc. have all made Boeing their sole supplier of aircraft for the next 20 years.