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

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Modest orders on second day of Air Show

The world's biggest air show kicked off its second day on Tuesday with orders for 20 jets for European plane maker Airbus and an update...

The Associated Press

Farnborough, U.K. — The world's biggest air show kicked off its second day on Tuesday with orders for 20 jets for European plane maker Airbus and an update from Boeing that its previously delayed 787 jetliner remains on schedule.

Boeing also announced an order from Nigerian carrier Arik Air for seven next-generation 737s, while Russian aircraft maker Sukhoi said that Avialeasing was buying 24 of its Superjet 100 aircraft.

Airlines from oil-rich Middle Eastern countries have saved the Farnborough International Airshow from an otherwise lackluster start, signing orders for around 150 planes worth more than $25 billion on Monday.

Many European and U.S. airlines are struggling to cope with rocketing fuel prices and dampening passenger demand, combined with tighter credit conditions.

In contrast, several Middle Eastern carriers with the benefit of oil-backed sovereign wealth funds are banking on anticipated huge investment and greater tourism in the Gulf region to justify spending at a time when there is talk in the industry of potential cancelations and delays on existing orders.

"We carriers from the Gulf are the center of attraction these days," said Qatar Airways CEO Akbar Al Baker as he announced an order for four Airbus A321s worth $360 million at list prices to a packed room of journalists.

The Qatar deal, which includes options for another two single-aisle A321s, was followed by an announcement by Tunisair for 16 Airbus jets worth $1.94 billion.

The Tunisian carrier firmed up an order for the purchase of 10 single-aisle A320s, three widebody A330s and three of the revamped, long-range A350-800 XWBs. The deal had already been announced in April after Tunisair gave a "letter of acceptance" to Airbus.

Airlines often negotiate substantial discounts to the catalog prices and the actual value of both deals was not announced.

In earlier orders at Farnborough, which alternates years with an event at Le Bourget in France, low-cost airline FlyDubai bought 50 Boeing next-generation 737-800s, worth around $3.74 billion in total at current list prices.

In a smaller deal, Saudi Arabian Airlines signed a contract with Airbus for eight of the European plane maker's A330-300 wide body aircraft, worth $1.6 billion.

The United Arab Emirates sought to move deeper into commercial aerospace through a deal Tuesday between the aerospace division of Abu Dhabi investment fund Mubadala Development Co. and Airbus parent EADS to produce and supply parts for Airbus.

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The plant will start operations in 2010 initially making wing components, with the intention to eventually develop and design larger composite structures.

EADS CEO Louis Gallois hailed Mubadala's "ambition to become a major player in the highly technological aerospace industry.

"It's a region which is buying a lot of planes and which wants to develop its industry: we have to be there," he told The Associated Press.

Airbus' rival Boeing, which inked deals for 95 aircraft on Monday, said Tuesday it remains on track to test fly its 787 jetliner in the fourth quarter of this year and make its first delivery in the third quarter of 2009 — but acknowledged that its timetable remains tight. (See related story)

Etihad Airways provided a vote of confidence in the 787 aircraft on Monday when it split an order for 100 aircraft between Airbus and Boeing worth $20 billion at list prices. The national carrier of the United Arab Emirates bought 55 planes from Airbus, including 10 of the superjumbo A380, worth a total of $11 billion and 45 Boeing aircraft, including 35 of the 787s.

Tuesday's announcement by Arik Air that it is purchasing seven next-generation 737s adds to its existing order of 10 of the aircraft.

Arik Air also announced its intent to purchase four Boeing 747-8 Intercontinentals, but the order will not be added to the plane maker's order book until final contract negotiations are completed.

Sukhoi said its deal with Avialeasing was worth more than $630 million. Avialeasing took an option for 16 additional aircraft. Sukhoi said ahead of the show it expected to book orders for 30 Superjets.

At the Paris air show last year, 506 orders were taken between Airbus and Boeing. Credit Suisse said it expects around 200 to 300 orders to be announced at Farnborough.

Almost 1,500 exhibitors from 35 countries will show off the latest in aviation technology at Farnborough. The air show runs through July 18 for aerospace professionals only; public days are July 19 and 20.

Copyright © 2008 The Seattle Times Company

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