Boeing Upbeat, Airbus Wins Order at Paris Air Show

LE BOURGET, France – A defiant Boeing said Monday the aviation industry's troubles may be ending, while Airbus kicked off the race for plane orders at this year's Paris Air Show, clouded by rainy skies, recession and the unexplained crash of Air France Flight 447.

With the global aviation industry facing unprecedented losses and falling revenue, no one attending the 100th anniversary of the world's first and largest air show was expecting Airbus or Boeing to unveil the raft of new jet orders that have been a staple of the event over the past four years.

But some airlines were still willing to get out their checkbook, including Gulf-based carriers such as Qatar Airways and Gulf Air. Airbus scored its first order of the Paris Air Show from Qatar Airways, which wants 24 jets from the Airbus A320 family.

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Qatar Airways' head, Akbar al-Baker, announced a firm order for 24 of the planes, including 20 single-aisle A320s and firming-up of orders for four A321 jets announced last year at the Farnborough Air Show.

He said the deal announced Monday is worth $1.9 billion, which is about the same as the list price. Airlines, however, usually negotiate steep discounts to the list price, particularly during grim economic times.

Meanwhile, Rolls-Royce PLC signed a $1.5 billion order with Gulf Air to supply engines for the Bahrain-based airline's new Airbus A330 long-haul aircraft. The British aircraft engine manufacturer will supply Trent 700EP engines to power 20 Airbus A330 aircraft, with deliveries beginning in 2012.

Canada's Bombardier announced it had won, confirmed or converted a total of 35 firm orders for its CRJ1000 NextGen jets by Spanish regional carrier Air Nostrum, in deals worth a total of $1.75 billion.

Boeing set the tone for its air show last week, when its vice president for marketing of commercial aircraft Randy Tinseth warned not to expect a flurry of orders.

Still, Boeing Co. sought to strike a positive tone in face of the ambient gloom surrounding the show, saying key programs such as its 787 remain on track and that the industry's long-term prospects are strong.

"Are we down in the dumps about the status of this industry? Have we allowed the current economic situation to overwhelm us and discourage us from the path ahead? The answer is absolutely no," Scott Carson, president and chief executive of Boeing's commercial aircraft division, said Monday.

"At this point it appears to us that the economic conditions have bottomed," Carson said. "If they have bottomed and a recovery comes next year, I think we have a shot at getting through."

Boeing recently cut its outlook for the commercial aircraft market for the first time in at least a decade, which Carson said was mainly driven by the drop in freight traffic due to the global recession.

Carson said long-term prospects for the industry "are as robust as they have ever been."

However, in answer to some hopeful attendees who thought Boeing might spring a surprise first flight during the show, Carson had disappointing news.

"If you were expecting the 787 to fly during the air show you will be disappointed," said Carson. "If it had happened during the air show it would have been great, but It was never our intention."

"The airplane will fly when it is completely ready," he said.

Already reeling from the global recession, the industry gathering near where Air France Flight 447 should have landed only two weeks ago has been shaken by the still-unexplained crash. Investigators have only two more weeks to find the flight data and cockpit voice recorders before the signals emitted by small beacons on the so-called black boxes start to fade. Without them, the cause of the May 31 accident may never be fully known.

"The aviation community is still under some shock with the severity of this accident," Airbus CEO Tom Enders said.

France's prime minister, Francois Fillon, formally opened the show, touring Airbus displays with French CEOs under a pelting rain. Industry executives from around the world sloshed their way through muddy lots to the Le Bourget airfield, and rain tangled transport to the crowded event, delaying many visitors.

The Paris Air Show is marking its 100th anniversary. It opened to industry on Monday, and then to the public Friday to Sunday. Organizers expect around 300,000 visitors this year, about the same as the last show in 2007. More than 2,000 exhibitors from 48 countries are taking part.

The traditional dogfight over orders between rival planemakers Boeing Co. and Airbus SA has been tempered as the world economic crisis forces airlines to cancel or delay plans to buy planes. Tight credit markets have made it more difficult for potential customers to secure financing.

The International Air Transport Association has warned that the world's airlines will collectively lose $9 billion this year.

So far this year, Boeing - which is cutting 10,000 jobs - has taken orders for 73 planes, but with cancellations of 66, the net order intake is only 7 jets.

Airbus - which hasn't announced extra job cuts but had already been cutting payroll in a restructuring program launched in 2007 - has booked fewer orders at 32, but with fewer cancellations has a better net balance of 11 jets.

Still both plane makers are cushioned by order backlogs of around 3,500 planes.