Le Bourget - Who sold the most aircraft?

Airbus's aircraft deals exceed Boeing's at Paris air show

Value of orders at fair falls compared with last year's Farnborough
 

The deal-making finished at the Paris air show on Thursday, veterans of the aerospace industry's biggest trade fair were quipping that this had been the quietest event in years.

Not because the value of aircraft sold by Airbus and Boeing fell compared with last year's Farnborough air show in the UK and the previous Paris fair in 2013. But rather because the new engines that powered aircraft down the runway at Le Bourget airport were markedly less noisy than their predecessors.

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Bombardier's C-Series, the long-awaited narrowbody passenger jet that last year missed an air show debut because of problems with its Pratt & Whitney engines, was one of the stars in Paris. "I was really surprised by the low level of noise," said Christophe Menard, analyst with Kepler Cheuvreux. "The new generation of engines is moving in the right direction in terms of fuel consumption and noise."

Despite expectations that the number of aircraft sold at Paris would be less than at Farnborough last year, the combined total for both Airbus and Boeing was slightly ahead of 2014. "We are getting more than I expected," said Tom Enders, Airbus's chief executive.

"The depth and breadth of orders we have received has been impressive," said Randy Tinseth, Boeing's vice-president of marketing. He admitted, however, that the orders might have been higher if customers did not have to wait so long for their aircraft. "It creates a special challenge when you are selling aircraft," he said.

Boeing has 5,700 jets in its order backlog, and Airbus more than 6,300, pushing deliveries for some of the most popular aircraft out as much as eight, or nine years.

Together in Paris, Airbus and Boeing announced orders and commitments by airlines and leasing companies to buy 752 aircraft worth $107.2bn at brochure prices, against deals in Farnborough for 697 jets valued at $115.5bn. The higher than expected number of deals in Paris should quell concerns that the boom of recent years was over, said Mr Tinseth.

Airbus emerged victor over Boeing, after unveiling at the last minute the largest deal of the show with a commitment from Hungarian low cost carrier Wizz Air to buy 110 A321 narrowbody aircraft valued at $13bn. The actual cost to Wizz is likely to be substantially less because airlines secure discounts.
Over the duration of the show, Airbus had unveiled deals to sell 421 aircraft valued at $57bn. Boeing had sold 331 jets worth $50.2bn.

Rob Stallard, analyst with RBC Capital Markets, urged caution on the large number of commitments made by airlines and leasing companies at the show to buy jets. Unlike firm orders, these commitments fall short of binding contracts. "The number of memorandums of understanding and letters of intent at this air show appears to be significantly higher than historically," he said.

Some 64 per cent of Airbus' deals and 54 per cent of Boeing's fell into the commitment category - much higher percentages compared with Farnborough last year or Paris in 2013.
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The two companies scored some significant wins for their older models, with Saudi Arabian Airlines placing an order for a regional version of Airbus's A330 wide-body jet, and Qatar Airways agreeing to buy freighter versions of Boeing's 777 long-range aircraft. These deals are crucial to keeping production lines running smoothly - and bolstering profits - while Airbus and Boeing transition to new re-engined versions of the aircraft over the next few years.

"These are two programmes where success or lack of success will have a greater impact on earnings than any other programme," said Sash Tusa, analyst at Agency Partners.

Orders aside, Mr Enders said he was proud of the deal announced by Airbus's defence and space division with OneWeb of the US to build hundreds of satellites. The project would require a new satellite factory in the US. "For our space business this is really transformational," said Mr Enders.

Yet the show is primarily a commercial aircraft showcase and was dominated by talk of the next new jet.
Many industry insiders are tipping Boeing to launch an aircraft that will slot between its narrow and wide-body models, but John Leahy, Airbus's chief commercial officer, dismissed talk of the so-called middle of the market aircraft as "hot air".

Mr Tinseth said the company's focus was going to be on the production of aircraft rather than speculating on new models. "Our focus will be on making sure we deliver on the programmes we are committed to," he added.