Airbus Books $14 Billion Deal With Air Arabia -- Update

Date : 11/18/2019 @ 7:29PM
Source : Dow Jones News
Stock : Boeing Co (BA)
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Airbus Books $14 Billion Deal With Air Arabia -- Update

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By Benjamin Katz 

DUBAI -- Airbus SE booked a $14 billion order for its single-aisle A320neo, underscoring the disadvantage American plane maker Boeing Co. is facing for orders amid an eight-month grounding of the 737 MAX.

The deal from Air Arabia, for 120 A320neos, follows similar narrow-body wins -- including a 100-jet deal from Spirit Airlines and a 300-jet order from India's Indigo -- for Airbus in recent months.

The Air Arabia order was announced at the biennial international air show here. The deal's dollar value is based on list prices and doesn't include normal discounts.

Boeing, for its part, booked an order for 10 MAX jets from Turkey's SunExpress. That number, though small, is important for the manufacturer at a time when the aircraft still requires regulatory certification to resume flights.

MAX sales have stalled since the grounding, with the notable exception of a surprise, preliminary deal with British Airways owner International Consolidated Airlines Group SA made at the Paris Air Show in June. That deal, for 200 aircraft, has yet to be completed, but was seen as a vote of confidence for Boeing.

Complicating its ability to capitalize on its rival's troubles, Toulouse, France-based Airbus has been suffering production issues that forced it to lower its delivery guidance for the year last month, making Airbus suppliers wary of attempts to further scale up output to meet demand.

"There are customers expressing their frustration" with the MAX delays, said Airbus Chief Executive Guillaume Faury. Airbus production slots for the A320neo are full until 2024, he said, which is when the first of the new Air Arabia models will be delivered.

"I don't want to comment on what's happening on the other side of the Atlantic, but basically it contributes to the lack of capacity," said Mr. Faury. "We are under pressure because of this lack of capacity."

In a further blow to Boeing, the chairman of its biggest customer for the MAX in the Middle East -- low-cost carrier Flydubai -- told reporters he could switch to the Airbus A320. Sheikh Ahmed bin Saeed Al Maktoum, who is also CEO of long-haul giant Emirates Airline, stopped short of saying he was leaning that way. He said he was on good terms with Boeing. Boeing declined to comment on Sheikh Ahmed's comments.

Boeing reiterated yesterday that it hopes to receive certification for the MAX in December with operations able to restart in January. The manufacturer has racked up hundreds of undelivered aircraft as it works to get signoff for its fixes from the Federal Aviation Administration after two fatal crashes.

Airbus also secured a $16 billion order for its A350 wide-body jets from Emirates, a significant commitment for one of its biggest jets but less than an earlier promise by the Mideast carrier to buy $21 billion worth of Airbus planes.

Emirates said at the air show Monday it will take 50 A350s instead of its initial plan for 40 A350s and 30 A330neos. Airbus has struggled to drum up a significant backlog for the A330neo, a rival to Boeing Co.'s 787 Dreamliner.

In a separate setback to Boeing, Abu Dhabi's Etihad Airways said earlier on Monday that it was planning to take 20 fewer of its aircraft than Boeing had counted on. Etihad has undertaken a strategy overhaul and fleet review after suffering losses in the last three years amid oil price volatility, bad investments and increased competition.

 

(END) Dow Jones Newswires

November 18, 2019 14:14 ET (19:14 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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