Airbus pips Boeing at Paris Air Show with US$13.7b last-minute order

Singapore

THE world's two biggest planemakers Airbus and Boeing went head-to-head in the battle for plane orders this week at the 51st Paris Air Show, with Airbus narrowly pulling ahead with a huge, 11th-hour deal that gave it the edge over its US rival.

With orders at last year's Farnborough Air Show in the UK surpassing the US$200 billion mark, the final tally for the Paris show is likely to fall short, amid expectations of less aggressive purchases following a record-breaking spree in recent years.

The Farnborough and Paris shows take place in alternate years.

European planemaker Airbus said it won US$57 billion in deals for a total of 421 aircraft - largely its single-aisle A320 family of planes - out of which 124 aircraft were firm orders worth US$16.3 billion; the remaining 297 were commitments valued at US$40.7 billion.

Boeing had US$50.2 billion in deals for 331 planes, of which US$18.6 billion were new and firm orders.

In a late announcement just as the part of the show for the trade drew to a close on Thursday, Airbus netted the biggest haul of the show by signing a Memorandum of Understanding (MOU) with Hungary's Wizz Air for 110 A321neo aircraft worth US$13.7 billion. It was also its single biggest A321 order.

Bulk orders often come with significant - but undisclosed - discounts.

The triple-digit deal from Wizz Air, a low-cost carrier, also enabled Airbus to reassert its dominance on its homeground, just as Boeing was poised to pull off an upset; it eclipsed an order this week for 100 Boeing 737 MAX 8s from Dutch aircraft-leasing company AerCap, valued at a list price of US$10.7 billion. Boeing's upcoming 737 MAX is expected to be ready by year-end, ahead of its first flight early next year, the Chicago-based planemaker said this week.

With air traffic burgeoning in markets such as China and Indonesia, a number of Asia-based carriers plonked down orders for new planes: China's Minsheng inked an MOU for 30 single-aisle B737 aircraft at US$3.1 billion; Chinese budget carrier Ruili Airlines committed to 30 737 MAXs worth US$3.2 billion.

An undisclosed Asia-based airline signed an MOU with Airbus for 60 A320 neo aircraft for an estimated U$6.4 billion.

Korean Air split orders between Airbus and Boeing: it will buy 30 737 MAX 8s and two 777-300ERs from Boeing and 30 A321neos from Airbus. Similarly, Indonesia's flag carrier Garuda committed to 60 planes from Boeing and 30 from Airbus, collectively worth some US$20 billion.

Orders for both planemakers were mostly in the narrow-body, single-aisle category and for wide-body jets such as the A350XWB, B777 and B787; jumbo jets such as Airbus A380 failed to rouse much interest amid waning interest for four-engine aircraft. However, Russian cargo airline Volga-Dnepr Group signed an MOU for another 20 B747-8 freighters worth US$7.4 billion.

At least one order was cancelled. With Russia in the economic doldrums, Aeroflot was forced to end an order placed in 2007 for 22 Boeing Dreamliner jets worth US$4.8 billion.

The lack of available delivery slots in the near term, which could prompt airlines to turn to lessors, could also crimp demand this year.

With no slots for the A320neo series or the A350 until at least 2020, Airbus "doesn't have enough planes to sell", Airbus chief operating officer Tom Williams told Bloomberg.

Both planemakers are aiming to ramp up production rates for their popular single-aisle products in the coming years, given robust demand, as airlines expand and phase out older aircraft in favour of new, more fuel-efficient models. Aviation Week reported that Airbus plans to boost production rates from 42 a month to 50 by early 2017 for its A320s, and that Boeing will beef up production of its 737 from 42 currently to 52 per month by 2017.

The show was largely dominated by the two biggest planemakers, but European aircraft manufacturer ATR announced that it had bagged at least 46 firm aircraft orders and 35 options for its regional turboprop planes worth nearly US$2 billion; Embraer said it had garnered some 50 firm orders worth more than US$2.6 billion.

With the trade wrapping up their deal-making on Thursday, the Paris Air Show, held at the Le Bourget airfield just outside the French capital, opens to the public from Friday until Sunday. More than 300,000 visitors are expected at the industry's oldest trade event.

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