First day of air show yields $55 B in orders

Boeing Co. and Airbus SE battled to a stalemate on the first day of the Farnborough air show, tallying more than $55 billion in jetliner sales in a flurry of announcements at the biggest event of its kind this year.

Airlines and leasing firms committed to taking about $29 billion of planes from Airbus, including dozens of the European manufacturer’s top-selling A320neo family of narrow-body jets. Boeing was close behind, with about $26 billion in deals at the UK expo, including confirmation of an $8.8 billion order from India’s Jet Airways.

Business was dominated more than ever by the latest version of the workhorse A320 and Boeing’s rival 737 narrow-body jet, which together have generated more than $1.2 trillion in sales. The latest generation of planes are more fuel-efficient than their predecessors, helping to spur unprecedented demand and swell their combined order backlog past 12,000 planes. Despite production hiccups, Airbus is pushing its engine makers to speed output so it can eventually deliver more than 70 A320s a month from about 50 currently.

“A rate of 60 is not going to be enough, so we are discussing rate 70 or even more,” Airbus commercial-aircraft chief Guillaume Faury said in an interview with Bloomberg Television. “These are the problems of growth that we like to manage. It’s going to take a bit of time.”

Air shows are notorious for late deals that make it hard to judge who’s winning after one day. Last year’s Paris expo was dominated by orders for Boeing’s new Max 10, the biggest version of the 737. The year before, floods forced Farnborough to close early on its first day, delaying announcements.

While deal volume on Monday surpassed last year’s $49 billion, there were no new models to whip up excitement. Boeing’s planned midmarket plane is still on the drawing board, and Airbus had even rolled out its newest jetliner, the A220 developed by Bombardier, a week before the trade expo.

“It’s been subdued,” Kevin Michaels, managing director with AeroDynamic Advisory, said in an interview.

Paris is the larger, more exuberant of the annual events that rotate between France and the UK That was underscored by a truncated flying display Monday, noticeable for the lack of fighter jets thundering overhead to interrupt business meetings on the show grounds.

Still, blockbuster orders are brewing, like a potential $23 billion deal Airbus is discussing, according to people familiar with the matter, with Malaysia’s AirAsia. Asian buyers like Jet and Taiwanese startup StarLux Airlines led Monday’s action.

Boeing finished last year’s Paris air show with orders and commitments valued in excess of $75 billion, spurred by the Max 10 launch, compared with a tally of more than $40 billion at Airbus. Those deals amounted to more than double the $50 billion posted at the most recent 2016 expo in Farnborough.

Beyond the orders, manufacturers, suppliers and airlines use the event to haggle over contracts and float ideas for new planes and ventures. Military chiefs and governments hammer out arms deals and announce defense initiatives. Farnborough is also a showcase for new technology and ideas, from flying taxis to space flight.(Bloomberg)