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Originally published Tuesday, July 15, 2008 at 12:00 AM

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Boeing and Airbus share $24 billion in orders

Billions in orders from Gulf carriers buoy outlook at Air Show

Bloomberg News

Airbus and Boeing shared almost $24 billion of orders on the first day of the Farnborough Air Show, with all of the contracts coming from two Persian Gulf carriers.

Etihad Airways of Abu Dhabi purchased 55 Airbus jetliners, including 10 A380 superjumbos, worth $11 billion at list prices.

The carrier also bought 45 planes from Boeing valued at $9 billion, and the U.S. manufacturer won a $3.78 billion contract for 54 short-haul aircraft from low-cost airline FlyDubai.

Boeing Commercial Airplanes chief Scott Carson said Monday he was more optimistic than Airbus about the impact that spiraling fuel costs and slowing economies may have on orders.

The European company said over the weekend that as much as 27 percent of the backlog may be lost in a worst-case scenario. Carson said the need for replacement planes will support demand.

"For a business where they say the sky is falling in, things look pretty good," said Richard Aboulafia, vice president at Teal Group, a Fairfax, Va., consultant who spoke on the first day of the biennial event at an airfield southwest of London. "Airbus has a greater reliance on emerging markets and discount carriers in their backlog, so they're more at risk."

Yet Airbus sales chief John Leahy could well win the order battle at the show.

In an interview after the Etihad news conference, Leahy said he expects about 200 orders and he raised his forecast of sales for the entire year from 700 to about 800.

Sheik Ahmed bin Saif Al Nahyan, Etihad's chairman and the emir of Abu Dhabi, plans to spend $200 billion during the next 10 years to diversify from an oil-based economy, with tourism key.

Etihad ordered 20 A320 narrow-bodies and 25 long-haul A350s from Toulouse, France-based Airbus, together with the A380 double-decker.

Stock of Airbus parent EADS rose 66 cents to 11.40 euros, paring its drop this year to 48 percent and valuing the company at 9.28 billion euros ($15 billion).

Etihad's contract with Boeing, already recorded in the plane maker's books, was for 35 787 Dreamliners and 10 777 wide-bodies. Boeing stock closed down 15 cents, at $63.13.

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The A350 and 787 are new, competing designs, with the Dreamliner scheduled for delivery to its first customer in the third quarter of next year and the Airbus rival due in 2013.

Arab carriers may almost double their combined fleet to 900 planes by 2015, according to a regional trade group. Etihad, Qatar Airways and Dubai-based Emirates were among the biggest buyers last year for Boeing and Airbus.

Etihad took options for 25 more Boeing 787s and 10 777s, plus purchase rights for 10 787s and five 777s. It has options for five Airbus A320s, 10 A350s and five A380s and purchase rights for a 15 A320s, 15 A350s and five A380s.

Deliveries will span 2011 through 2020.

Startup carrier FlyDubai will buy Boeing 737-800 aircraft for delivery from May 2009 through 2015. It plans to begin flying in mid-2009, serving routes to cities in Saudi Arabia, Qatar and Kuwait not served by Emirates.

Of the 54 planes, 50 are new, FlyDubai said. Four will be leased from Babcock & Brown Aircraft Management and are already in Boeing's order backlog.

The airline said it has the right to switch the order to extended-range 737-900ERs in the future.

Boeing won 475 net orders in the first half of this year, 12 less than Airbus. It delivered 241 aircraft, four fewer than its European competitor.

Carson said Monday the need for more efficient aircraft will help buoy orders even as surging oil prices, slowing economies and tighter credit weigh on the ability of airlines to make purchases.

Only "a handful of customers" have so far asked to defer aircraft, Carson said.

"Clearly economic growth is slowing across the developed world and we're also seeing increased risk in emerging markets," he said. "In this recent era of high oil prices we expect those trends and that difficulty to continue. But at the same time we see the replacement demand for our product remaining robust."

Seattle Times aerospace reporter Dominic Gates contributed to this report.

Copyright © 2008 The Seattle Times Company

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