Billions of dollars are at stake as the world’s largest plane makers, Boeing and Airbus, duel over orders this week at the Farnborough Air Show, which opens outside London on Monday and is the biggest event of its kind this year.
Beyond the order avalanche, manufacturers, suppliers and airlines use the event to haggle over contracts and float ideas for new planes and ventures. Military chiefs and governments hammer out arms deals and announce defense initiatives. Farnborough, which alternates with the Paris air show, is also a showcase for new technology and ideas, from flying taxis to space flight.
Boeing CEO Dennis Muilenburg said on Monday the possible fallout from the US-China trade dispute is a concern for the Chicago-based manufacturer. Aerospace thrives on free and open global trade, Mr Muilenburg said, and finding solutions is “an important topic to us”.
Asked if European rival Airbus might benefit from the tensions, he said “it’s a concern we have”, although there are unlikely to be any sudden shifts in the order backlog or delivery pattern. He said Boeing has deep relationships with China and is engaged in a “very good dialogue” with local customers. China needs a positive contribution from the aerospace industry to help fulfil its growth ambitions, while Boeing and its suppliers help generate a huge trade surplus as well as manufacturing jobs in the US. Finding a positive outcome is important for both sides, he said.
Airbus, meanwhile, announced orders totalling $9.2 billion at list prices for its next-generation A350 wide-body. Taiwanese start-up StarLux Airlines said it is buying 12 A350-1000 aircraft and five of the smaller A350-900s in a deal valued at $6bn at list prices that exclude customary discounts. Sichuan Airlines Corp. will purchase 10 of the widebody planes. The A350-900 carries a tag of $317.4 million apiece, valuing the mainland carrier’s order at $3.2bn. Sichuan will also lease four of the planes.
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The US manufacturer got things going with a $4.7bn order for 14 777 Freighters and purchase rights for an additional seven. The new order will double DHL’s global 777 fleet and help it curb emissions, the delivery service said.
Heading into the show, Toulouse, France-based Airbus was closing in on orders totalling $29bn, based on list prices, from two Asian carriers, Malaysia’s AirAsia, and StarLux Airlines. The $23bn AirAsia deal would give a boost to Airbus’s slow-selling A330neo wide-body, while adding to the order pile for the popular A320neo narrowbody family. AirAsia would become the biggest customer for the marquee jet. StarLux, founded by former Eva Airways chairman Chang Kuo-wei, is aiming to start long-haul service to North America by 2021.
Airbus is seeking to jump-start the order book for its newly acquired C Series small jetliner, now dubbed the A220. Going into Farnborough, the plane maker was trying to iron out the last hurdles to a 60-jet order from David Neeleman, founder of JetBlue Airways, and a group of investors who are trying to start a new US low-cost airline. The A220 programme got an important vote of confidence from Air Lease founder Steven Udvar-Hazy, who told Bloomberg the A220 is “a more attractive prospect” under Airbus. “This has changed the whole landscape in terms of its credibility.’’
The largest manufacturer of jet engines, CFM International, has a message for Airbus and Boeing executives who’re mulling a boost in production of their narrow-body jetliners next decade: not so fast. Airbus and Boeing are undergoing an unprecedented order boom fuelled for single-aisle jets driven by fuel-saving planes and growth in air travel, especially Asia. That’s put pressure on suppliers - especially engine manufacturers - who have fallen behind on orders.
