Bloomberg News

Airbus $21 Billion Sales Blitz Tops Boeing as Show Opens

July 15, 2014

Airbus

An Airbus A380 and an Airbus A350 on display on the first day of the Farnborough International Airshow. Photographer: Paul Thomas/Bloomberg

Airbus Group NV (AIR) extended its lead over Boeing Co. (BA:US) on the second day of the Farnborough Air Show by pulling in a record deal for single-aisle jets and bolstering sales of its new wide-body A330neo.

AirAsia Bhd. ordered $13.8 billion of A330neos today, earning a kiss for Chief Executive Officer Tony Fernandes from Fabrice Bregier, who runs Airbus’s jetliner unit. SMBC Aviation Capital Ltd. took $11.8 billion of planes and two other lessors signed deals valued at $8.8 billion. Boeing’s accords from two customers at the event near London came in at $5.8 billion.

Airbus’s fast start at the aviation industry’s largest expo offered welcome news to a company where cancellations cut first-half net orders to only 290 aircraft, trailing Boeing’s 499. The A330neo debuted yesterday, as Airbus ended months of speculation on whether it would put new engines on the current A330.

More from the Farnborough Air Show:

  • F-35 Cleared to Fly, Boosting Prospects of Air Show View
  • Airbus Said to Win AirAsia Order for Revamped A330Ne
  • GE to Develop High-Volume 3-D Printer Plant for Jet Engine Parts

“Boeing had seemed to be the one with momentum and Airbus wanted to reverse that impression at the air show,” said Nick Cunningham, managing partner at Agency Partners LLP in London. “Getting the A330neo launched looks and feels better.”

Airbus’s haul today built on $21 billion in orders and sales agreements announced yesterday, almost triple the tally for Chicago-based Boeing, according to data compiled by Bloomberg Industries.

Global Supremacy

The air show, which alternates annually between Paris and Farnborough, spotlights the jockeying for global sales supremacy by Boeing, the current leader, and Toulouse, France-based Airbus. The event draws manufacturers, airlines, lessors, suppliers and inventors for a flurry of meetings and dealmaking.

“Airbus has a fondness for air-show fireworks,” Richard Aboulafia, an aerospace analyst with Fairfax, Virginia-based Teal Group, said in a phone interview.

As AirAsia became the first airline buyer for the A330neo, Bregier grabbed Fernandes and bussed him on the cheek. The passion on display at the press conference then flowed from Fernandes to John Leahy, Airbus’s sales chief, who found himself on the receiving end of another smooch.

Airbus owes much of its show bounce to lessors, whose support is important because they place jets with multiple airlines -- a step toward ensuring wider customer acceptance of planemakers’ offerings.

First Buyer

The A330neo’s first buyer at the show was Los Angeles-based Air Lease, whose chief executive officer, Steven Udvar-Hazy, had urged Airbus to offer a version of the 20-year-old A330 with upgraded, more-efficient engines. Air Lease also booked an order for 60 of Airbus’s single-aisle A321 model.

AerCap Holdings NV (AER:US) said it would buy 50 A321neos worth $5.14 billion, the first jet purchase since the world’s biggest independent aircraft lessor bought Hazy’s former company, International Lease Finance Corp., for $7.6 billion in May. The purchase of A320-family planes by SMBC was Airbus’s biggest single-aisle order from an aircraft lessor.

CIT Group Inc.’s leasing unit said today it would buy A330 wide-bodies as well as single-aisle aircraft valued at $4.7 billion, before Avolon Aerospace Leasing Ltd. agreed to purchase A330s for $4.1 billion.

The early results don’t fully reflect discussions that could yield more sales later in the year, John Wojick, Boeing’s chief commercial aircraft salesman, said in an interview. “Sales ebb and flow,” he said.

Max, Dreamliner

Boeing’s opening-day order book included five sales of its single-aisle 737 Max and six orders for the 787-9 Dreamliner, the newest version of the carbon-fiber plane, to Avolon. The Bloomberg Industries tally for Boeing and Airbus included orders and options.

According to the people familiar with Boeing’s order discussions, BOC Aviation Pte is set to commit to at least 50 of the Max jets. The people asked not to be identified because the details are private. BOC Aviation also said today it would buy 43 A320-type jets from Airbus valued at $4.1 bilion.

Jet buyers typically negotiate discounted rates, so list-price aircraft valuations don’t translate directly into revenue. Planemakers also draw a distinction between firm orders, such as Air Lease (AL:US)’s agreement yesterday for A321neos, and commitments, such as the planned purchase of the A330neo.

For Airbus, keeping all of yesterday’s firm orders -- and confirming the preliminary agreements -- will be especially important after a first half marked by 225 cancellations. That compares with 54 for Boeing.

Sales of long-haul jets, a market where Boeing and Airbus share a duopoly, have cooled this year. Boeing announced just nine new wide-body orders in the first half of the year, while Airbus’s twin-aisle jet order book shrank by 21 jets.

To contact the reporters on this story: Andrea Rothman in Farnborough, England, at aerothman@bloomberg.net; Julie Johnsson in Farnborough, England, at jjohnsson@bloomberg.net; Richard Clough in Farnborough, England, at rclough9@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Ed Dufner at edufner@bloomberg.net Ed Dufner


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Companies Mentioned

  • BA
    (Boeing Co/The)
    • $127.32 USD
    • 1.01
    • 0.79%
  • AER
    (AerCap Holdings NV)
    • $44.59 USD
    • -0.60
    • -1.35%
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