Business World

Tuesday 17 October 2017

Boeing beats its rival with $58bn worth of jet orders

A Boeing 737 Max
A Boeing 737 Max
Boeing chief executive Dennis Muilenburg

Julie Johnsson

Boeing secured twice as much in order value at the Paris Air Show as rival Airbus, marking the US planemaker’s first victory in five years at the aviation industry’s annual showcase.

Boeing won orders and expressions of interest for about 420 planes worth as much as $58bn (€52bn) based on a Bloomberg count, getting a boost from demand for the Max 10, the biggest version of its 737 workhorse.

Airbus, which posted a tally of 229 airliners valued at about $25bn (€22.4bn), dismissed the setback and said it was focusing on meeting delivery targets to make up for production snags rather than seeking purchasers.

The haul of about $83bn (€74bn) in deals easily surpassed the $50bn (€44bn) signed at last year’s show in Farnborough, England, which was the lowest figure since 2010.

Asian lessors and airlines were particularly active as they girded for an accelerating travel boom.

The order binge reflected customer support for a new Boeing 737 model, and quietened concerns that demand is fading for new jetliners.

“Maybe people came to the show with muted expectations, but the order activity is positive on the backdrop of relatively strong air-traffic growth,” said Kelly Ortberg, chief executive officer of aerospace supplier Rockwell Collins Inc.

“New narrow-body introductions are exciting. I think we’ll all leave going, ‘The show was a little better than expected.”’

The biggest buyer at the Paris expo was General Electric Co’s GE Capital Aviation Services, which ordered 100 Airbus planes valued at $10.8bn (€9.7bn) and converted 20 Boeing production slots from earlier purchases to the planned 737 Max 10. That model, rolled out to combat Airbus’s hot-selling A321neo, secured 336 commitments, including customers shifting to it from the 737’s other Max versions.

The boost from the Max 10 should help Boeing’s order flow come close to matching deliveries this year, Boeing chief executive Dennis Muilenburg said.

Slumped

The measure, known as book-to-bill, fell below one during 2015 and 2016 as sales slumped for the Chicago-based manufacturer amid falling oil prices.

Demand had jumped earlier in the decade as high fuel prices spurred airlines to stockpile orders of more efficient planes such as Boeing’s upgraded 737 Max and Airbus’s A320neo.

That order flurry caused

Airbus’s backlog to more than double, surpassing 6,700 airliners.

Airbus is now focusing on speeding up deliveries following delays on the A320neo series and wide-body A350, chief operating officer Fabrice Bregier said.

The Toulouse, France-based manufacturer still plans to hand over about 30 more planes to customers this year than in 2016, which means the company will need to accelerate work in the second half, he said.

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