Airbus, Boeing land big deals at UK airshow
Airlines upbeat on outlook of global aviation industry
Britain sought to project an image of aerospace prowess at the Farnborough airshow on Monday, as Airbus and Boeing announced a raft of deals and issued optimistic outlooks for the global industry.
China’s Sichuan Airlines said it would be buying 10 A350 long-haul aircraft with a list price of $2.8bn, while India’s Vistara signed a letter of intent to buy 13 A320neo aircraft. Taiwan’s Starlux Airlines, which is developing a network across Asia and North America, said it had signed a memorandum of understanding for the purchase of 17 Airbus aircraft: 12 A3501000s and five A350-900s.
The Airbus deals announced at Farnborough, southwest of London, would add up to more than $17bn at catalogue prices for the aircraft if all orders are confirmed and prior to large discounts traditionally handed to purchasers.
Airbus’s US rival, Boeing, also announced a series of impressive deals including 14 777s to DHL for $4.7bn and 30 737 MAX for Jackson Square Aviation for $3.5bn. “We continue to see the aerospace market grow very strongly,” Boeing CEO Dennis Muilenberg said on the eve of the Farnborough show, echoing similar comments by Airbus.
But Farnborough is taking place in the shadow of a trade war between China and the US as well as Britain’s stalled negotiations to exit the EU.
Airbus, which employs some 15,000 people in Britain, has warned it would reconsider investments in Britain if it crashes out of the EU in 2019 with no deal.
Airbus CEO Tom Enders in June said the government had “no clue” over its Brexit plans.
After Prime Minister Theresa May unveiled more conciliatory proposals last week for Britain to retain strong trading ties with the EU after Brexit, Enders said that the government was now “going in the right direction”.
But organisers warned that aircraft could stop flying if May fails to clinch an adequate Brexit deal with Brussels.
“Our worst-case scenario is genuinely — and it is not alarmist or scare mongering — that aircraft will not fly,” said Farnborough International chairman Paul Everitt, who is also head of aerospace, defence and space trade body ADS.
May sought to play down concerns with an optimistic message in her inaugural speech at the show. “We’re leaving the EU and forging a new future for our country and, as we do so, want to ensure that the UK remains one of the best places in the world for aerospace companies to do business,” she told participants.
She said Britain wanted to “continue as world leaders in innovation” and announced £343m in public-private investment in innovative research and development, including new electric aircraft technology.
May also announced a £2bn programme with Italy’s Leonardo to design a new generation fighter jet, following speculation that Brexit could disrupt co-operation in this field.
“Today I can announce that the government will join with BAE Systems, Leonardo, MBDA and Rolls Royce to fund the next phase of the Future Combat Air System Technology Initiative through a partnership known as Team Tempest,” she said.