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Airbus jet re-launch heralds busy air show

Farnborough, England, July 14, 2014

Airbus will kick off the Farnborough Airshow with up to 100 commitments for its revamped A330neo wide-body jet, industry sources said, deepening a contest with Boeing for up to $250 billion of orders at the core of the long-haul jet market.

After months of speculation, the European planemaker will on Monday unveil an upgrade of its popular but ageing A330, powered by Rolls-Royce engines and offering 14 percent in fuel savings. Airbus Group declined to comment.

The upgraded A330 is Airbus's attempt to prolong the life of its profitable twin-aisle jet, as the European company tries to preserve market share against Boeing's much newer 787 Dreamliner.

The A330 has enjoyed a resurgence of sales because of delays in deliveries of Boeing's technically ambitious but temperamental carbon-fibre jet, but it is in need of a refresh to keep selling.

Analysts say it also plugs a potential future gap in the Airbus wide-body jet portfolio after poor sales of its A350-800 - the minnow of the next-generation A350 family whose development looks set to be halted or suspended as a result.

The commercial debut of two models called A330-800neo and A330-900neo, first reported by Reuters, heads a busy schedule of announcements on day one of the show, at which Boeing could hit back promptly with new sales of its 787 Dreamliner.

Analysts have until now generally predicted a low-key show, because of steadily growing fears of airline overcapacity.

But industry sources gathering for the July 14-20 event said evidence pointed to well over 500 orders or commitments ranging from a 100-plane lessor deal to a single plane for Fiji. It may not be immediately apparent, however, how many orders are new.

Malaysia's AirAsiaX has campaigned for an A330neo to save on fuel bills but is seen likely to exchange any new order against at least part of its 38 outstanding current-generation A330s.

Boeing begins the week with a clear advantage after gaining 703 gross orders up to July 8, or 649 after cancellations, against Airbus's end-June total of 515 gross orders and 290 net.

SALES DRIVE

After an intense sales drive in recent weeks, Airbus is expected to outpace its US rival by about two to one at the air show - but not without losing a shoot-out on prices.

Boeing's newest customer, UK airline Monarch Airlines, looks set to confirm it defected from Airbus after a tough competition for 30 jets worth some $3 billion, first reported by Reuters.

Qatar Airways may finalise a $19 billion order for 50 Boeing 777-9X 406-seat airliners and place an order for 25 or more Airbus A320-family aircraft, industry sources said.

Boeing will also be hoping to secure a long-awaited order for its 737 MAX from lessor ILFC, recently acquired by Dutch lessor AerCap, which may also order 50 Airbus A321 aircraft.

Other major leasing companies such as Air Lease Corp , CIT Leasing, BOC Aviation and others are shopping this week, industry sources said.

Doubts over the future of the A350-800 have meanwhile left Airbus with the problem of converting 34 remaining orders.

Hawaiian Airlines, until now seen as an obstacle to the change, told Reuters last week it would look at the A330neo.

But Aeroflot, which has eight on order, remained non-committal. - Reuters




Tags: airbus | Boeing | Orders |

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