Boeing Outsells Rivals at Paris Air Show -- Update
June 22 2017 - 11:07AM
Dow Jones News
By Robert Wall
LE BOURGET, France-- Boeing Co. beat Airbus SE in the annual
jetliner-orders bonanza at the Paris Air Show, but both came out
winners in one crucial way: Demand for both plane makers' most
popular single-aisle jets remains buoyant.
Overall orders for planes have slowed recently, after a
yearslong run of supercharged growth fanned by fast-growing budget
carriers and cash-rich Mideast buyers. These buyers have stayed
away from bigger jets, making the so-called narrowbody, or
single-aisle, market the key to the industry's medium-term
health.
At the end of the show, Boeing claimed $75 billion in deals for
571 new planes. Airbus said it secured $42 billion in deals for 144
firm orders, along with 202 other looser-commitment plane
agreements. That was better than many analysts had expected.
The flurry of orders and commitments secured by Boeing, the
world's No. 1 plane maker, was fueled by its launch of a new
narrowbody model, the 737 Max 10. Boeing got 16 customers to sign
up to the new plane, including United Continental Holdings Inc. It
exits the Paris show with 361 deals for the new plane.
"There is a very strong robust market for the single-aisle"
aircraft, said Boeing's new chief plane salesman Ihssane Mounir in
his first major event since taking the job.
Boeing said 214 of the deals for the new plane were order
conversions from other models. Mr. Mounir said the conversions were
partly a reflection of buyers wanting to move quickly to acquire
the new plane.
Rival Airbus lagged behind with 286 single-aisle deals.
"This is a slower year for orders than previous years," John
Leahy, chief plane salesman for Airbus, said.
Iranian airlines have become a relatively recent new customer
base for both jet makers after global powers in 2015 lifted
sanctions on the country in return for Tehran agreeing to limits on
its nuclear program. Airbus on Thursday announced deals with two
Iranian carriers for 73 planes, though the U.S. government still
has to provide the licenses required because of American content on
the planes.
Though orders get much of the attention at the air show, plane
makers and investors are more focused on aircraft deliveries that
correlate more closely with cash flow.
The Paris deals underscored Airbus and Boeing plans to build
more of their popular single-aisle planes, both companies said.
David Joyce, president of General Electric Co.'s aviation unit,
said the company would be building 800 more engines than planned in
the coming three years for Airbus and Boeing to meet strong demand.
It builds those engines in cooperation with France's Safran SA.
Airbus builds about 50 A320 planes a month and is on a path to
producing 60 a month from mid-2019. Airbus Commercial Airplanes
President Fabrice Brégier said the company would be interested in
producing even more single-aisle planes if engine suppliers could
boost output. Mr. Brégier said demand for the planes is high enough
to increase output further. "The limiting factor is the engine
availability," he said.
Boeing also said it is studying higher output, though Mr. Mounir
said the company, for now, was sticking to plans to increase
production from 42 narrowbody planes a month today to 57 in
2019.
There is less appetite to build more planes in the widebody
market, where order volume have been soft for some time. Airbus
only secured 20 widebody deals. Boeing signed deals for 56
long-range jets, mostly its Dreamliner model. The plane maker has
been weighing whether to boost production of that model, too, but
Mr. Mounir said it was too early to make that call now.
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
June 22, 2017 10:52 ET (14:52 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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