Plane Buyers, Worried About Trade Tensions, Ask for Anonymity
July 18 2018 - 9:36AM
Dow Jones News
By Robert Wall and Andrew Tangel
FARNBOROUGH, England -- Airline customers are shying away from
putting their names on plane deals, worried it could exacerbate
global trade tensions, Eric Schulz, Chief Commercial Officer of
plane making giant Airbus SE said Wednesday.
Plane buyers have asked to remain unnamed "not to fuel the fire"
on trade, Mr. Schulz said. That anxiety is particularly pronounced
in Asia, he told investors.
"The world today is governed by the tweets we receive every
morning from one side of the Atlantic," Mr. Schulz said.
That is creating pressure among airlines and governments, he
said, adding that "some of our customer have asked as not to fuel
the [trade] war."
The European plane maker kicked off the third day of this week's
Farnborough International Air Show with the announcement of a deal
for six A330-900 wide-body planes from an undisclosed customer.
More than half of the company's Farnborough orders so far are from
buyers which aren't publicly identified. "Clearly we don't like
undisclosed orders but we have to respect customers," Mr. Schulz
said.
Boeing, the world's largest plane maker by sales and the biggest
U.S. exporter, Wednesday announced a deal from VietJet Aviation
Joint Stock Co. valued at $12.7 billion before industry-standard
discounts. The budget carrier plans to buy 100 of Boeing's 737 Max
plane though the contract still needs to be completed.
Aerospace companies are gathered at Farnborough amid heightened
trade tensions between the U.S. and China, as well as among
Washington and a number of the U.S.'s traditionally close trading
allies, including the European Union, Mexico and Canada. Industry
officials said they aren't seeing an impact on demand for travel or
planes, but are watching if trade could dent demand.
Boeing hasn't announced any deals with undisclosed buyers at the
biennial aerospace jamboree outside London.
Mr. Schulz said he expected to exit from the air show with
around 750 aircraft deals. Strong demand, particularly for
single-aisle planes, could allow Airbus to charge airlines more for
each, he said.
Mr. Schulz also said he was targeting orders this year for the
A380 superjumbo, the Toulouse, France-based company's struggling
flagship airplane. The A380 is popular with customers, but has
struggled to win big orders because airlines worry about filling
the double-decker plane that can seat more than 200 passengers.
Airbus has had to cut production plans for the A380 to about six
planes a year in 2020 because of slack demand. Chief Financial
Officer Harald Wilhelm said the program would lose money at that
output level, but that efforts to cut costs to produce the plane
would continue.
Boeing also has enjoyed strong demand for its rival 737 plane.
The Chicago-based plane maker has said it is sold out until 2023.
VietJet said it won't get its first 737 Max until 2022.
Write to Robert Wall at robert.wall@wsj.com and Andrew Tangel at
Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
July 18, 2018 09:21 ET (13:21 GMT)
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