Demand is down
The boom in commercial plane orders of recent years appears to be giving way to a more sustainable pace of demand at the 2015 Paris air show, with jetmakers increasingly focused on lifting production to meet their record backlog of sales.
“The market is definitely slowing,” said Sash Tusa, aerospace and defense analyst at UK’s Agency Partners. “There are fewer orders this week than there have been at any air show in recent years. Manufacturers are going to have to fight much harder for what’s available.”
Some moderation in demand had been widely anticipated. Industry sources told Reuters on the eve of the show that, barring any last-minute surprises, Airbus Group SE and Boeing Co. might struggle to announce 500 orders between them, compared with 697 at the Farnborough event last year, with which Paris takes turns.
There seems little prospect of a sharp deterioration in demand, however. Airbus raised its 20-year forecast for jet sales on Monday, citing the rapid expansion of airlines in Asia and the Middle East and echoing a similarly upbeat outlook from Boeing last week.
The biggest challenge facing plane makers now is to ramp up production to meet the record $1.8-trillion (U.S.) of orders they have booked for the coming decade.
-Reuters
Boeing lands biggest order
Boeing pulled in the biggest deal so far at the Paris Air Show, a $10.7-billion order, as the expo’s focus shifted to the competition with Airbus in selling single-aisle jets.
AerCap Holdings NV agreed Tuesday to buy 100 of Boeing’s 737 Max 8 planes, the upgraded version of the company’s top- selling model. The aircraft are the first Maxes for the Netherlands-based lessor, which has already bought Airbus’s A320neo, a rival to Boeing’s offering.
The accord marked the biggest Paris transaction yet by numbers and value, as both manufacturers seek to maintain their momentum and unveil more sales in the coming days. Based on list prices, Boeing orders and commitments reached $29.6-billion, topping Airbus’s $16.4-billion, according to data compiled by Bloomberg.
“This is a big day for us, it’s a real highlight of the show,” said Ray Conner, the head of Boeing’s commercial aircraft unit.
-Bloomberg
Other Boeing deals
-Ireland-based leasing company SMBC Aviation Capital ordered 10 of the 737MAX-8 jets, worth up to $1-billion.
-Indonesian domestic airline Sriwijaya Air ordered two 737-900 jets, for up to $198-million.
-Chinese low-cost carrier Rulli Airlines made a commitment to buy 30 planes from the 737 MAX range.
-Chinese leasing company Minsheng Financial signed a preliminary 737 deal for 30 planes.
-Associated Press
Lockheed Martin looks to Bombardier
Lockheed Martin Corp. announced on Tuesday that it will team with Raytheon Co. and Canadian plane maker Bombardier to develop a new surveillance and command and control aircraft for a future U.S. Air Force competition.
Lockheed said the team aimed to develop a low-risk, affordable replacement for the E-8 Joint Surveillance Target Attack Radar System (JSTARS), a ground surveillance, battle management, and command and control aircraft that was built by Northrop Grumman Corp.
Northrop and Boeing have also said they plan to compete for the contract when the Air Force launches a competition in the coming years.
The head of Lockheed’s aeronautics division, Orlando Carvalho, told Reuters the project would be led by Lockheed’s Skunkworks research and development shop and would feature an open architecture that would allow the government to own the technical baseline for future upgrades.
Lockheed will serve as the main integrator for the project, while Raytheon will bring its expertise with various surveillance sensors, mission systems integration, and JSTARS communications.
Bombardier will provide its ultra-long-range Global business jet, which Lockheed said is less expensive to operate than modern airliners and requires less refueling.
“We plan to bring all this technology and expertise together to offer what we believe will be a very competitive solution,” Carvalho said.
-Reuters
‘No panic’ at Airbus
Airbus is in “intense” talks with potential new customers for its A380 superjumbo as it considers enhancements to raise the appeal of the biggest passenger jet.
“There’s no panic, it’s an orderly process,” chief executive officer Tom Enders said in an interview Tuesday at the Paris Air Show.
Enders said Airbus is studying ways to help airlines make better use of the plane’s spacious cabins. It’s also considering stretching the fuselage to add seats, or equipping the plane with new engines to increase efficiency, though the CEO made no commitments on either products or timetables.
The Toulouse, France-based company has struggled to win new airline customers for the A380 for almost three years now. Emirates is the largest buyer, with 140 in total on order, and has pushed Airbus to fit new engines on the double-decker.
-Bloomberg
‘I don’t give a damn about the ILO’
Qatar Airways chief executive Akbar Al Baker on Tuesday accused the International Labor Organization of having a “vendetta” against Qatar and its state carrier after the UN agency called for it to stop discriminating against women staff.
The ILO published a report on Saturday detailing its recommendations to Qatar on how the airline should change its employment rules in order to end discrimination. The report was triggered by complaints from global workers’ rights movements, the ILO said.
Rules cited as discriminatory included the requirement that employees get permission to change their marital status, the automatic dismissal of cabin crew members who fell pregnant and surveillance of the employees’ private lives.
“I don’t give a damn about the ILO – I am there to run a successful airline,” Al Baker told Reuters at an aviation show in Paris when asked about the ILO ruling.
“This is evidence of a vendetta they have against Qatar Airways and my country. My country has responded to the ILO accusations in a very robust way. We clarified the clauses in our contract.”
The ILO report said Qatar justified Qatar Airways’ dismissal of pregnant women by citing expecting mothers’ apparent lack of physical fitness to fly and inability to meet the job requirements.
The report also said that Qatar Airways had introduced new employee contracts in December, 2014, that no longer state that permission is required for a change in marital status.
Eighty per cent of Qatar Airways’ 9,000 cabin crew workforce are women, the ILO said in its report, citing the Qatari government.
“Protective measures should include action taken to ensure that a woman worker does not lose her job during pregnancy and that maternity is not a source of discrimination,” the ILO said.
-Reuters