Boeing, Airbus Battle for a $100 B a Year Jet Market

Reuters16.07.2012 Aviation & Space
Boeing, Airbus Battle for a $100 B a Year Jet Market

Boeing, Airbus Battle for a $100 B a Year Jet Market

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Boeing landed the first blow at last week’s Farnborough Air Show, winning an order worth up to $7.2 billion from US lessor Air Lease, as a market share battle with its European rival Airbus plays out.


Boeing said the order was for 75 of its fuel-efficient 737 Max jets - a model that is key to its attempted fightback against Airbus's rival A320neo short-haul aircraft.

Kuwait airplane leasing company ALAFCO also announced a commitment for 20 Boeing 737 MAX 8s valued at $1.9 billion at current list prices at the Farnborough Air Show.

However,  the biggest deal at Farnborough came Friday from United Continental Holdings, Inc. and its wholly owned subsidiary, United Air Lines, Inc., for 150 737 airplanes, including 100 of the new 737 MAX 9. The deal, worth $14.7 billion at list prices, also includes 50 Next Generation 737-900ERs (Extended-Range).

Airbus wrapped up its air show with a series of deals worth $6.35 billion with Russian Carrier UTair, Synergy Aerospace of Latin America, Middle East Airlines, and Irish leasing company Avolon. The four deals take Airbus’ total at the U.K. Air Show to $16.9 billion.

Boeing said it took total orders and commitments over the past week for 396 airplanes, valued at around $37 billion. That is more than double Airbus' performance of $16.9 billion orders and commitments for a total of 115 aircraft.

Airbus and Boeing are locked in their fiercest battle for up to a decade, slashing prices to win orders for their latest narrow body jets and storing up potential trouble for future profit margins.

Boeing Chief Executive Jim McNerney has predicted the US plane maker, helped by the 737 Max, will outsell Airbus for “a number of years” having trailed its European rival for nearly a decade. Airbus also expects Boeing to make up ground this year.

Ray Conner, Head of Boeing Commercial Aircraft, said between the roars of display flights and the clinks of corporate hospitality that the US company was confident of growing market share but does not have a specific target in mind.

“I am not going to be tied to market share numbers; ... we are focused on producing and winning,” he told reporters at the event, which was attended by British Prime Minister David Cameron.

Though economies are stuttering, aircraft demand remains relatively strong as airlines modernize fleets to survive high fuel costs and the balance of growth shifts towards Asia, prompting Boeing to raise forecasts last week.

EADS unit Airbus booked orders for 1,419 planes worth some 90 billion pounds ($140 billion) in 2011, compared with Boeing's 805. The pair competes for the lion's share of a jet market estimated at $100 billion a year.

The defense industry, however, is struggling as countries cut military procurement budgets.

“A continued uncertain defense outlook is likely to impact overall financial performance in 2012”' said Tom Captain, global aerospace and defense leader at business consultancy Deloitte.

At Farnborough Air Show, Airbus unveiled plans to revamp its A330 wide-body passenger jet in order to boost its range. It said the 240 tonne A330-300 would have an increased range of 11,020 km, meaning it can now connect London to Tokyo, Frankfurt to Cape Town or Beijing to Melbourne.

The European group is revamping the A330 at a time while Boeing is pondering a new competing version of its 787 Dreamliner.

 

Source: Reuters; Boeing; Airbus

 



 
 

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