Flying high
Boeing dominated the deal flow at the Paris Air Show, overwhelming rival Airbus on the back of Asian demand for the new Max 10.
Boeing dominated the deal flow at the Paris Air Show, overwhelming rival Airbus on the back of Asian demand for the new Max 10, the biggest version of its 737 workhorse.
The U.S. plane maker secured orders and expressions of interest for more than 500 jets worth as much as $66 billion through Tuesday, compared with Airbus’s tally of 227 airliners for about $24 billion. Airbus could still fire back, as the Toulouse, Francebased manufacturer’s veteran sales chief John Leahy will be loath to be outdone in what’s set to be his last appearance at the aviation industry’s biggest gathering.
Boeing’s 737 Max 10, rolled out to combat Airbus’s hot-selling A321neo, has secured $30 billion in commitments alone at the show. While many deals were tentative or involve conversions of existing contracts, the overall haul looks set to surpass the total $50 billion signed at the 2016 show in Farnborough, England, which was the lowest figure since 2010. Asian purchasers were particularly active as they gird for an accelerating travel boom. That’s a contrast to the relatively restrained buying from crowded markets in the U.S. and Europe.
“We have never seen a demographic shift like that ever in the world, in terms of the scale but also the purchasing power,” Domhnal Slattery, chief executive officer of Avolon, said after the world’s third-largest lessor ordered $8.4 billion of Boeing planes. “We’re backing that global trend.”
The leasing company, which is now owned by Bohai Capital Holding Co., was joined by other Asian buyers of Boeing planes, including SpiceJet Ltd. of India, Chinese carrier Okay Airways Co. Ltd., Japan Investment Adviser Co. and BOC Aviation Ltd. The leasing arm of China Development Bank signed agreements to buy planes from both Airbus and Boeing.
Avolon decided to lock in deliveries of as many as 125 of Boeing’s upgraded narrow-body jets because production slots are “very valuable real estate.” The Max family of planes is oversold through 2020, and capacity is finite for the model favored by budget carriers, Slattery said in an interview. He projects the middle class in Asia to eventually swell by more than 1 billion people in the coming years.
“These people are going to get on planes,” said Slattery. “And there’s no going back.”
Boeing said demand for single-aisle planes as well as wide-bodies remains buoyant, despite concerns about economic and political turbulence in the Middle East and low fuel prices serving as disincentive to invest in more efficient aircraft.