Airbus Eclipses Boeing in Plane Deals at Air Show

If Boeing Co. (BA) has been rocked by this week's stack of new plane deals announced by rival Airbus, it certainly isn't showing it.

Airbus unveiled deals involving over 700 planes including more than 300 firm orders, edging ahead of the U.S. company which entered this week's Paris air show well ahead.

"Our longstanding policy is not to store up order announcements for an air show. We used the show to confirm that the 787 Dreamliner remains on schedule for first deliver in May 2008 and we look forward with growing excitement to the 787 roll-out on July 8," said a Boeing spokesman.

The U.S. company took its firm order book for the year to 510 planes, for an increase of 81, led by a deal for 63 from influential lessor International Lease Finance Corp..

Airbus had a net of 188 planes beforehand and leaves the show at about 519, by Reuters estimates.

"I think what it really says is 'We're back'," said Airbus Chief Commercial Officer John Leahy.

Airbus signed 425 firm orders this week worth $61 billion at list prices, Leahy said.

Highlights included Singapore Airlines firming a tentative deal from last year for 20 of the newest Airbus, the A350 XWB due in 2013, and a deal for 80 of the planes from Qatar Airways.

Both, however, firmed earlier commitments.

The secret to success in the plane business is no different from any other, it hinges on finding new business and selling profitably.


Selling to influential airlines and lessors is key.

"ILFC is probably the stand-out order of the show," said Doug McVitie, managing director of France-based aerospace marketing and forecasting firm Arran Aerospace, referring to Boeing's biggest deal, which added another top name to the 787's impressive list of brand-name buyers.

ILFC leases planes to the world's biggest airlines and its choices, like that of rival lessor GE Commercial Aviation Services, help drive the design of new models and the purchases of top carriers.

Airbus traditionally uses the biennial Paris air show to announce a stack of new business, but analysts expressed some scepticism this week, noting many deals were tentative, were conversions of earlier pacts, or involved unknown carriers.

"Have you heard of any of these airlines?" said one London-based aerospace analyst who covers Airbus parent company EADS, referring to the truly new deals from Airbus.

He said the jury remains out on whether top airlines with large fleets will buy the new A350 XWB in the numbers it needs to break even.

Airbus and Boeing both have massive backlogs and lengthy customer lists filled with the world's most famous airline names.

But as France-based Airbus presses to catch up with Boeing in the sales race, under pressure because its A350 model will reach market five years after the rival Boeing 787, analysts are looking closely at who wants the plane, and who is holding back.

Singapore and Qatar were large deals but both involved firming earlier commitments.

Airbus' announcements otherwise relied heavily on lesser-known carriers such as Jazeera Airways and Afriqiyah Airways.

Aerospace analysts looking ahead note influential carriers such as British Airways and Germany's Lufthansa -- both expected to commit to either the 787 or A350 this year -- were scarce at Paris.

Another notable holdout this week has been engine maker GE Aviation, which Airbus hopes will offer an engine for its new A350 XWB model. There was no such deal at Paris.

Offering a choice of engines helps planemakers sell aircraft as airlines have different preferences, but only UK maker Rolls-Royce is offering power for the A350.

Beneath its impressive headline numbers, Airbus also continued to struggle with its A380 superjumbo, which has hit a wall in finding new buyers.

Emirates, already the plane's biggest customer, signed a tentative deal for more, but Airbus failed to sign a new airline to its list of 14 carriers committed to the A380.

Some 95 percent of the planemaker's more than 260 customers have stayed away, prompting concern the 12 billion euro ($16.08 billion) programme will never turn a profit.

Airbus' Leahy said the overall success of the week for the planemaker in fact placed the planemaker under even more pressure to get on with the business of lowering its costs base under its Power8 cost-savings programme.

"We need Power8 even more. We are not matching Boeing in terms of cost," Leahy said.

"The biggest mistake we could have right now is matching Boeing in terms of revenues and not matching them in terms of cost. Power8 is more important than ever."

German unions citing hefty Airbus deals at the Paris air show this week called on the company to trim back on planned job cuts and factory sales.