Boeing lands first blow at Farnborough
Farnborough (England), July 9, 2012
US planemaker Boeing landed the first blow at this week's Farnborough Airshow, winning an order worth up to $7.2 billion from US lessor Air Lease, as a market share battle with its European rival Airbus plays out.
Boeing said on Monday under the grey skies of a typically unsettled British summer that the order was for 75 of its fuel-efficient 737 Max jets - a model that is key to its attempted fightback against Airbus's rival A320neo short-haul aircraft.
Airbus and Boeing are locked in their fiercest battle for up to a decade, slashing prices to win orders for their latest narrowbody jets and storing up potential trouble for future profit margins.
Boeing chief executive Jim McNerney has predicted the US planemaker, helped by the 737 Max, will outsell Airbus for 'a number of years' having trailed its European rival for nearly a decade. Airbus also expects Boeing to make up ground this year.
Ray Conner, head of Boeing Commercial Aircraft, said between the roars of display flights and the clinks of corporate hospitality that the US company was confident of growing market share but does not have a specific target in mind.
'I am not going to be tied to market share numbers; ... we are focused on producing and winning,' he told reporters at the event, which was attended by British Prime Minister David Cameron.
Though Boeing is expected to pick up the lion's share of orders this week, David Joyce, the president and chief executive of GE Aviation predicted there would not be as many orders as in previous years amid a faltering global economy.
'I think this show will be a little more subdued relative to 2011 but still a very, very positive outlook going forward. Production rates of airplanes on the commercial side are all on their way up. Our order books are full,' he said.
Though economies are stuttering, aircraft demand remains relatively strong as airlines modernize fleets to survive high fuel costs and the balance of growth shifts towards Asia, prompting Boeing to raise forecasts last week.
EADS unit Airbus booked orders for 1,419 planes worth some 90 billion pounds ($140 billion) in 2011, compared with Boeing's 805. The pair compete for the lion's share of a jet market estimated at $100 billion a year.
The defence industry, however, is struggling as countries cut military procurement budgets.
'A continued uncertain defence outlook is likely to impact overall financial performance in 2012,' said Tom Captain, global aerospace and defence leader at business consultancy Deloitte.
Also at the airshow, Airbus unveiled plans to revamp its A330 wide-body passenger jet in order to boost its range. It said the 240 tonne A330-300 would have an increased range of 11,020 km, meaning it can now connect London to Tokyo, Frankfurt to Cape Town or Beijing to Melbourne.
The European group is revamping the A330 at a time when Boeing is pondering a new competing version of its 787 Dreamliner. Airbus hopes to announce a customer for the enhanced A330 during this week's airshow.-Reuters