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Friday, July 13, 2012 - Page updated at 09:00 p.m.
Boeing, Airbus see sunny side of modest Air Show order tally
By Dominic Gates
Seattle Times aerospace reporter
Despite the economic gloom in Europe and the torrential rain in England, executives at Airbus and Boeing found reasons to be sunny about the deals unveiled at this week's Farnborough Air Show.
Boeing even managed to land a blockbuster order of 150 planes from United Airlines as the show drew to a close Thursday.
That order built some sales momentum for its new single-aisle jet, the 737 MAX. The number of firm MAX orders bumped up to 649 jets. Including nonbinding deals, Boeing said the MAX has commitments for more than 1,200 jets.
For Airbus, sales expectations at Farnborough were always low after the record orders at last year's Paris Air Show for its rival single-aisle plane, the A320neo. But at this stage, the neo remains way ahead of the MAX with 1,454 firm orders.
And sales chief John Leahy did manage to bag an important order from Cathay Pacific for the A350-1000, bolstering Airbus's more fragile widebody jet position.
Yet it was a lackluster haul of orders for the two aerospace giants compared to the Paris show, said aviation analyst Richard Aboulafia of the Teal Group.
"The emerging markets are clearly leveling out. The Middle East was completely absent," Aboulafia said. "This industry has gotten addicted to these huge Middle East numbers of previous air shows. They were bound to end."
For him, the only order worth celebrating at the show was United's order for 50 Boeing 737-900ERs, because those are to be delivered near-term, starting next year.
While the two manufacturers prepare for an unprecedented ramp-up in production rates, Aboulafia worries about order deferrals and a dip in jet deliveries in the years 2014 through 2016, as airlines wait for the next-generation, more fuel-efficient jets available after that.
Executives at the airplane manufacturers had no time for such dark analysis.
Airbus won a total of 115 orders and commitments. That compares with 730 jet orders in Paris last year.
Leahy insisted Thursday that the commitments will be firm "within weeks."
And he pronounced himself "happy with the results of the show" and on track to meet his goals for the year. One of those is to establish the A320neo as the dominant single-aisle jet in a market that Boeing and Airbus historically have split almost evenly.
"We weren't looking for any big numbers greater than this," Leahy said.
Boeing won 396 orders and commitments in the past week, including 251 firm orders. That's better than the 138 firm sales in Paris.
Many of those commitments, perhaps all of them, were not sealed this week — they must have been included among the 1,000 commitments to buy the new 737 MAX that Boeing claimed at the beginning of the year.
Yet Boeing ended on a high note with that order from United, unveiled in Chicago by top brass from both companies, for 100 MAXs plus 50 current-generation 737-900ERs.
That deal was 50 percent bigger than expected. Valued at $14.7 billion at list prices, in reality it was worth roughly $7.7 billion after standard discounts, according to market data from aircraft-valuation firm Avitas.
Boeing Commercial Airplanes vice president of marketing Randy Tinseth declared himself "very pleased" with sales momentum on the MAX.
"The market is awfully broad and deep and diverse," Tinseth said at Farnborough. Aside from Europe, he said, "we're really seeing resilience in the rest of the market."
On Thursday, the last real workday of the show, Airbus held a muted media event. And Boeing's action was in Chicago.
At the closing Airbus news conference, Leahy and new Airbus CEO Fabrice Brégier had to defend the A350 program, which has some manufacturing problems and may not meet its schedule.
The A350's smaller models will compete with the 787 Dreamliner, and the big A350-1000 will compete against the 777.
Brégier conceded that Airbus is having trouble with the automated drilling of carbon fiber composite panels at the wing plant in Wales. To get around the issue, he said mechanics are hand-drilling the panels on the first wing sets to allow time to get the automation working perfectly.
In any case, Brégier said, such problems are to be expected on a development program. He predicted the A350 issues will never be as bad as the three-year delays on both the Airbus A380 and the Boeing 787.
Pointedly referring to Boeing's early problems with the Dreamliner, Brégier said that Airbus was taking production slowly and would never roll out an airplane only to have to take it back into the factory and dismantle it.
"This will not happen with me as CEO," Brégier said.
Still, while Brégier said there is as yet no A350 delay, "we will not say conversely that we will stick to the line."
For Boeing, the show ended on a high note. Journalists gathered along with Tinseth in the Boeing media chalet to listen to the Chicago news conference announcing the order.
When it ended, in case anyone might doubt that Boeing would count the 150-jet United order in its Farnborough tally, Tinseth stood and announced: "This ends the orders for the Air Show."
Dominic Gates: 206-464-2963 or email@example.com
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