Boeing beats Airbus in air-show orders for first time since 2012
Boeing secured twice as much in order value at the Paris Air Show as rival Airbus as demand for the Max 10, the biggest version of its 737 workhorse, pushed the Chicago-based plane maker to its first win at the aviation industry's annual showcase in five years.
Boeing won orders and expressions of interest for about 370 planes worth as much as $52 billion in the three days through Wednesday, compared with Airbus's tally of 229 airliners valued at about $25 billion.
Airbus dismissed the setback, saying it's focusing on meeting delivery targets to make up for production snags rather than seeking new purchasers.
The haul of about $77 billion in deals easily surpassed the $50 billion signed at last year's show in Farnborough, England, which was the lowest figure since 2010. Asian purchasers were particularly active as they girded for an accelerating travel boom. That's in contrast to the relatively restrained buying from crowded markets in the U.S. and Europe. The bulk of agreements came from leasing companies, which have more leeway to delay deliveries.
"It seems lessors feel stronger about the need for more aircraft" than airlines do, George Ferguson, an analyst at Bloomberg Intelligence, said in a report. "Lessor orders could be of lower quality than airlines as they're removed from current financial fundamentals, and could be a sign of intense competition."
Even with the boost from the Max 10, order flow isn't expected to surpass deliveries this year, Boeing Chief Executive Officer Dennis Muilenburg said. That's because demand jumped in past years as high fuel prices encouraged airlines to scramble for more efficient planes.
That order flurry caused Airbus's backlog to more than double in two years to surpass 6,700 airliners. The company is now focusing on speeding up deliveries following delays on the A320neo series and widebody A350, Chief Operating Officer Fabrice Bregier told investors at a conference on Wednesday. Toulouse, France-based Airbus still plans to hand over about 30 more planes to customers this year than in 2016, which means the company will need to accelerate work in the second half, he said.
One of the largest airline customers at the Paris show was India's SpiceJet Ltd., with a deal for 40 Boeing planes, including 20 conversions, reflecting industry interest from Asia. The carrier was joined in orders at Boeing by Chinese operator Okay Airways Co. Ltd., Japan Investment Adviser Co. and BOC Aviation Ltd. The leasing arm of China Development Bank signed agreements to buy airliners from both Airbus and Boeing.
Avolon, the world's third-largest lessor, ordered $8.4 billion of Boeing models at the Paris event. The unit of Beijing-based Bohai Capital Holding Co. decided to lock in deliveries of as many as 125 of upgraded narrow-body jets from the U.S. company because the slots are "very valuable real estate," Avolon Chief Executive Officer Domhnal Slattery said.
The Max series is oversold through 2020, and capacity is finite for the model favored by budget carriers, Slattery said in an interview. He projects the middle class in Asia will swell by more than 1 billion individuals in the coming years.