Boeing 'disappointed'

As Air Malta is about to announce its decision to order the Airbus jets, powered by CFM engines, sources close to Boeing said they were very disappointed at the decision.

"We are truly disappointed and saddened at the decision, especially since we are convinced that the 737 was the preferred solution by Air Malta. We will elaborate once the decision is formally announced," they said.

The Boeing sources said the decision had a political, rather than commercial, undertone.

However, sources close to Air Malta said that Airbus had offered an excellent package and had a commercial edge over its competitors.

They said Airbus had offered "excellent financial, commercial and technical concessions amounting to several million liri."

Talks with Airbus and Boeing had been going on for months.

The final decision on the contract, believed to be worth between $500 million and $600 million, was taken at an Air Malta board meeting late last month.

The first of the aircraft is expected to be delivered in two years' time.

Air Malta has a mixed fleet, which includes two Airbus A320s. The airline will not be buying the new aircraft, but will be leasing them from International Lease Finance Corporation with an option to buy them.

Boeing insists that the $500 million package it had offered Air Malta is the best deal the airline and country could get.

Philip de St. Aubin, Boeing deputy vice-president for Europe, last month told The Times that his company was offering a family of 12 next generation 737's equipped with the breakthrough technology winglets.

The deal that Boeing had offered goes beyond the supply of the new fleet, Mr de St. Aubin had said. Boeing was talking in terms of bringing a significant contract of four to five ships to be built in the Maltese shipyards, promoting Malta as a tourism destination in the United States and to assist Air Malta to start offering high technology airplane modification work from here.