Tue, Jun 18, 2013 - Page 15 News List

Strategy crucial to big jet sales in Paris

BOEING-AIRBUS DOGFIGHT:Long-range jets are expected to be the focus of this year’s exhibition, while Bombardier and Embraer are promoting their regional jets

Reuters, PARIS

Visitors walk in front of a Dassault Rafale fighter on the first day of the rain-soaked 50th Paris Air Show at Le Bourget airport in France.

Photo: Reuters

Leading planemakers are battling over strategy for big jets as the Paris Airshow got under way yesterday.

After a bruising two-year fight for market share of popular smaller models, Airbus and Boeing Co are increasing the deployment of next-generation long-range jets, seen as crucial to the future of both companies and their suppliers.

Days after it surprised the industry by making the first flight of its new A350 just in time for the show, Airbus will attempt a curtain call on Friday with a fly-by for French President Francois Hollande, on only the plane’s third test.

“People are focusing on long-haul aircraft this year. It is a crucial segment and a fundamental one for the profitability of both constructors,” said Bruno Goutard, sector economist at credit insurer Euler Hermes, which has a key role in aviation.

Boeing said last week it sees a US$1 trillion market over the next 20 years for mid-sized, twin-engined passenger jets, a category that includes its 787 Dreamliner.

Europe’s Airbus and its US rival have placed bets worth tens of billions of dollars on the success of this market.

Behind them Canada’s Bombardier Inc is betting the same technology will be suitable for smaller planes as it seeks to boost orders for its new CSeries, due to fly this month.

Brazil’s Embraer is expected to announce an upgrade and possible fresh orders for its regional E-Jet.

For Boeing, the latest addition to its fleet, the 323-seat 787-10, is partly designed to serve dense routes within Asia — a region fast emerging as the world’s largest travel market.

The company claims it will have the best economics of its kind, while Airbus sees it as a repeat of a previous 767 flop.

Boeing re-introduced the 787 Dreamliner to service in April after a three-month grounding due to battery problems. Now it is also looking at a partial redesign of its 777 mini-jumbo.

The decision to go ahead and build a new 787 version, backed by up to 100 orders spread between five or six launch customers, is expected to be announced at Le Bourget today. Some orders may be converted from existing demand for smaller jets.

Leasing companies are at the event in force and could continue placing orders for narrow-body planes like the Boeing 737 MAX and the A320neo, as the civil side of the industry looks beyond the financial crisis and focuses on emerging markets.

Airbus said International Lease Finance Corp (ILFC) made a firm order yesterday for 50 short-haul A320neo jets.

Financial details were not disclosed. Los Angeles-based ILFC is Airbus’ biggest customer.

Another leasing company, Doric Lease Corp, signed a memorandum of understanding for the purchase of 20 A380s.

Leasing company GECAS yesterday said it would buy 10 of Boeing’s next-generation Dreamliner planes for US$2.9 billion, while Japan’s Skymark Airlines announced it would buy four of Boeing’s 737 MAX planes. It is the first Japanese airline to choose the US firm’s new mid-range plane.

Lufthansa could confirm an US$11 billion order for more than 100 Airbuses, while Air France may confirm an order for 25 A350s after resolving disagreements with engine maker Rolls-Royce Holdings Plc as the planemaker targets a “few hundred” show orders this week.

The military side of the world’s largest aerospace event looks set to be quiet by comparison with previous years. US companies have scaled back, but all eyes will be on the return of Russian fighters, noted for striking maneuvers.

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