Airbus orders pile up as Boeing stalls

LE BOURGET, France Wed Jun 22, 2011 3:06pm EDT

The Airbus A380, which was damaged last Sunday and repaired on Tuesday in Toulouse, takes part in a flying display during the 49th Paris Air Show at the Le Bourget airport near Paris June 22, 2011. REUTERS/Pascal Rossignol

The Airbus A380, which was damaged last Sunday and repaired on Tuesday in Toulouse, takes part in a flying display during the 49th Paris Air Show at the Le Bourget airport near Paris June 22, 2011.

Credit: Reuters/Pascal Rossignol

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LE BOURGET, France (Reuters) - Airbus put on a show of force at the Paris Air Show on Wednesday, securing a $16 billion deal for 180 aircraft from India's IndiGo and saying more deals were near, leaving rival Boeing in the shade.

The European planemaker, a unit of EADS, is expected to deal another blow to its U.S. rival by securing a $17 billion agreement with Malaysia's AirAsia for up to 200 of its revamped A320neo family of aircraft on Thursday.

"We are having a very strong show and we are very pleased with the response to the neo program: it's overwhelming," said Airbus sales chief John Leahy.

"We have sold 727 neo so far. There is a possibility that we will be at 1,000 by the end of the show."

Indian budget carrier IndiGo ordered 180 Airbus planes -- 150 A320neo jets and 30 of the classic variant -- a record in terms of numbers and the biggest boost to date for the A320neo as higher oil prices push airlines to seek more fuel-efficient aircraft.

"The big orders are coming from the non-mature countries with the airlines going where the cash is -- it's all part of the continuing shift in economic power from west to east," said Howard Wheeldon, senior strategist at UK brokerage BGC Partners.

Another boost for the A320neo came via U.S.-based Republic Airways, who signed a letter of intent to buy 80 of the revamped jets worth around $7 billion.

Boeing was not left entirely out in the cold, securing a provisional $3.3 billion deal with Russia's UTair Aviation for 40 of its next-generation 737 planes.

Industry sources told Reuters that Airbus and AirAsia executives were putting the finishing touches to a potentially huge order, likely to be announced on Thursday.

A deal with AirAsia would be the climax of a week in which Airbus has seen momentum build for the revamped version of its top-selling single-aisle aircraft.

There was more good news for Airbus after one of its A380s -- damaged on the eve of the world's biggest aerospace event -- returned to the skies over the sun-drenched showground, with the head of EADS predicting more sales of the $375 million superjumbo.

"The A380 is flying and we should have some more orders today," Gallois told RTL radio. Industry sources told Reuters Gulf carrier Qatar Airways would place an order for the superjumbo on Wednesday.

Chinese planemaker COMAC sent a shot across the bows of the big two by signing a deal with Ireland's Ryanair, which will see it help COMAC design a rival to Boeing's 737.


Engine maker Rolls-Royce and Qantas Airways said separately they had reached an out-of-court settlement over an engine explosion last year that forced an A380 to make an emergency landing. [ID:nL3E7HM093]

Airbus has outsold Boeing in the first three days of the show, so far notching up around $57 billion of orders, compared with Boeing's $22 billion.

Boeing is yet to decide whether to upgrade or redesign its top-selling single-aisle 737 as competition mounts from manufacturers in emerging markets.

The healthy demand from buyers has provided evidence that a solid upswing in civil aviation is under way, powered by emerging markets in Asia. High fuel prices have also given buyers a sense of urgency in purchasing fuel-efficient planes.

(Additional reporting by Gilles Guillaume, Kyle Peterson, Cyril Altmeyer, John Irish and Tim Hepher; Editing by David Holmes and David Hulmes)

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Comments (2)
Majick1 wrote:
Apparently Boeing needs to make products the customer wants instead of building what Boeing thinks the customer should buy. So typical of American business, it can’t think outside the box, but then they fly private jets and don’t have a clue about congested skies around airports.
Cool idea having less planes carry more passengers, but then again Boeing’s idea about smaller planes means selling more planes and having greater profit may have worked on stupid customers.

Jun 22, 2011 3:44pm EDT  --  Report as abuse
jasonhad wrote:
How much longer before Boeing shareholders insist on the departure of a chief executive that has presided over the loss of Boeing’s position as the go-to producer of the best civilian transports? He runs to the golf course, takes a position as director of IBM, and basically operates like Caesar while Rome burned. Time to get a decent replacement that can get the decision made on a replacement for the 737, kick butt on the 787 program, sell the heck out of the 747-800 and 777-300ER programs, which are airbus-killers, and figure out what to do about the Chinese replica of the 737/A-320, for which Boeing provided half the technology, and which is going to ruin profitability of the 737 replacement unless the new plane is a leap ahead in technology that Boeing finds out how to keep secret for a change.

Jun 22, 2011 3:59pm EDT  --  Report as abuse
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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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