Major Boeing order to bring air show to a close
FARNBOROUGH, England |
FARNBOROUGH, England (Reuters) - Boeing Co will cap off a subdued Farnborough Airshow with a $9 billion order from United Airlines for 100 aircraft, as strong demand for its revamped 737 Max helped the U.S. planemaker claw back market share from its European rival Airbus.
The aerospace industry's biggest event was a chance for Boeing (BA.N) to rack up some orders for its fuel-efficient 737 Max narrowbody, its answer to Airbus's short-haul offering, the A320neo, which stole the show in terms of orders in 2011.
Yet with order books already full and economies stuttering across the globe, the focus this year has been on how to deliver the backlog of planes.
Including the United Airlines deal, Boeing racked up around $30 billion of firm orders and commitments at the show, with Airbus (EAD.PA) securing deals worth around $17 billion.
Boeing's announcement with United Airlines (UAL.N), expected to be for 100 737 Max aircraft and first reported by Reuters in May, is due later this afternoon.
Boeing on Wednesday announced an order with Avolon, bringing to almost 200 the number of 737 Max aircraft sold in firm or provisional deals to leasing companies at the show.
The airshow has been relatively subdued, marked by a lack of firm orders, with the majority of those placed being commitments to buy planes at a later date. Orders from airlines have been slow, with leasing companies, such as CIT and Air Leasing Corp, signing some of the biggest deals.
"It is the end of the beginning," said aerospace analyst Nick Cunningham of UK-based Agency Partners, adding that the focus for investors and aerospace investors was firmly on keeping production running smoothly to deliver the planes that have been sold in an order boom in recent years driven by emerging markets.
MORE HORS D'OEUVRES THAN ORDERS
Although most publicity has been on revamps of popular models such as the A320neo and 737 Max, the manufacturers need to sell a lot of the current existing models in order to keep production plans intact and ensure a smooth transition.
Airbus confirmed it had set a target of selling 300 standard A320s this year, as reported by Reuters earlier this year, and sales chief John Leahy said it was on course to meet this.
"We have sold more than 500 A320neos since we launched the neo," Leahy told Reuters. "We're happy with results of the show, we weren't looking for any great numbers," he said, adding that more orders could come over the next few weeks.
The airshow has also thrown up concerns over further delays to the Airbus A350 programme, after the company admitted it was encountering assembly problems, specifically in drilling holes in the wing to fasten the skins to the structure.
"Although EADS is not changing its A350 guidance at this point, we think investors are sensitive to any negative developments on the programme, having been through similar issues on the Boeing 787 and A380," said RBC analyst Robert Stallard.
Airbus, which usually signals the end of the airshow with a morning press conference, on Thursday morning announced four small deals in quick succession with Avolon, UTair of Russia, Middle East Airlines and Colombia's Synergy Aerospace.
Those four deals comprise 29 firm orders and commitments for 25 planes.
"We weren't expecting 700 orders," said Airbus Chief Executive Fabrice Bregier. "We are in a very competitive market right now, with two companies which don't make gifts to each other." (Editing by Elaine Hardcastle and David Holmes)
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