Boeing inked over $11 billion worth of aircraft orders at the Paris Air Show on Monday, as airlines made aggressive purchases cumulatively worth more than $28 billion for 287 aircraft.
Purchasing activity was up sharply at the Air Show from the past couple of years, as airlines responded to an improved fiscal environment following the financial crisis, and brushed of concerns over sharply rising fuel prices, the slowing global economy, and uncertainty over the situations in Japan and the Middle East.
Boeing, despite being outsold 142 frames to 56 by rival Airbus SAS, garnered nearly as much of a financial commitment; with sales of its wide-bodied aircraft composing the lion’s share of net orders. Customer purchased 32 of the higher priced twin-aisle jets from Boeing, compared to just 15 for Airbus.
Airbus sales may have also been hurt by the announcement by chief salesman John Leahy that their major competitors to Boeing’s 787 (which will be delivered by the third quarter of this year to launch customer ANA); the A350, will be partially delayed by a minimum of 2 years. The stretched Airbus A350-1000, which competes with Boeing’s 777-300ER, has been pushed back to 2017 to allow Rolls Royce to supply a more powerful engine. The planned entry-into-service date of the smaller A350-900 is still 2013.
Boeing itself suffered heavy delays with the 787 project, which was initially scheduled to enter airline service by 2008. However the carrier insists that it has moved past those troubles. Boeing Commercial Airplanes President and CEO Jim Albaugh said that the carrier has too large of a backlog (7 years) to effectively sell its airplanes: “We are working to bring this down to three to four years,” he said. “We have [made plans to increase] the 737 rate to 42 a month, [increase] the 777 to 8.3 and will build the 787 to 10 a month. And we want to get that to 12. We have to be able to respond to our customers’ needs or they will be forced to make decisions they don’t want to [make].”]
Boeing also touted their largest offering, the 747-8 passenger; claiming that it had superior seat-mile economics to Airbus’ A380 super-jumbo. They backed this declaration by announcing orders for 17 747-8 Intercontinentals worth $5.4 billion at list price, and one 747-8i Business jet. The 17 747-8i passenger orders were split amongst two airlines; one ordered 15, the other 2. With the new sales, Boeing increased their backlog of 747-8i orders to 50 frames.
Since its launch in 2005, the passenger version of the 747-8 had failed to garner many orders beyond those of launch customer Lufthansa (for 20 frames and 20 purchase options). After a drought of close to 4 years, a second customer appeared; Korean Air, who purchased 5 frames. In March of this year; an additional 5 frames were purchased by Air China.
However the activity surrounding the 747-8i was not Boeing’s only major announcement of the day. Despite the majority of single-aisle buzz being concentrated around Airbus’ A320 NEOs (New Engine Option), Boeing’s older generation 737-800 still garnered 20 orders and 4 purchase options from Steven Udvar Hazy’s Air Lease Corporation. MIAT Mongolian Airlines also purchased 2 737-800 frames.
The A320 NEO, which takes advantage of new engine technologies to reduce fuel burn by 15% over current aircraft, has garnered hundreds of orders since its commercial launch in December, 2010. Boeing has not yet decided how it will respond to the threat of the A320 NEO, hop marketing executive Randy Tinseth said it would decide in the coming months whether to upgrade its existing 737 model in a similar manner to Airbus, or design an entirely new plane, which would not be available till the end of the decade.
Boeing also received an order from Qatar Airways for 6 additional 777-300ER twinjets, the A350’s main competitor. Qatar Airways is the launch customer for the A350, with over 80 frames on order. However, their CEO Akbar Al-Baker pronounced his displeasures with the significant delay from Airbus, which will affect over half of their planned fleet of A350s.
“This will dent our expansion and fleet placement program,” he told reporters. “It is very disappointing to us,” he said.
“Also we hope that the performance that they are today talking about is the right information and it will do what Airbus says that the airplane will do,” he said.
Boeing also collected 4 orders from Air Lease Corp for their stretched 787-9, which purports to replace current Boeing 777-200ER, and Airbus A340-300 aircraft. MIAT Mongolian placed an order for 1 Boeing 767-300ER, which continues to garner a trickle of orders; despite being based on a 1980s airframe.
For tomorrow, Boeing has scheduled 4 major announcements for aircraft orders. Aircraft scheduled to be displayed include an Air Berlin 737-700 and the Boeing 747-8 Freighter.