Paris Air Show Sales Wrap
June 24 2019 - 5:54AM
Dow Jones News
BARCELONA--Boeing Co. and Airbus SE booked more than 500
commercial plane orders and commitments at the Paris Air Show,
padding their order books amid industry headwinds and global trade
tensions, falling airline profitability and the grounding of
Boeing's MAX jetliner.
The event wrapped up with Airbus outclassing its U.S. rival both
in terms of orders and commitments secured and total deal value.
Here's a summary of how the plane makers fared at the world's
largest aerospace expo.
BOEING VS AIRBUS: Boeing arrived at Le Bourget battling one of
the biggest crises in its history, mired in the fallout of two
fatal 737 MAX crashes that led to a global grounding of the plane
in March. Already low expectations for the company took a further
hit when Airbus rolled out its longest-range single-aisle plane
yet, but Boeing surprised skeptics with a blockbuster order from
IAG for 200 of the 737 MAX on day two of the show. That ended the
MAX order lull endured by the U.S. plane maker since the Ethiopia
crash in March.
Airbus showed its strength with a raft of orders. The European
plane maker's new A321XLR racked up more than 120 orders and
commitments in total. That's a blow to Boeing, whose new midsize
plane will likely only be ready years after the A321XLR's first
flight. After five days of negotiations, Airbus amassed more than
$43 billion in new deals at list price, while Boeing's new orders
and commitments reached over $32 billion.
Following is a table of the top commercial buyers for each plane
maker, based on preliminary data compiled by Dow Jones.
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BUYER ORDER PLANE LIST PRICE VALUE
Turkmenistan Airlines 1 777-200LR $346.9 Mln
IAG 200 737MAX $24.0 Bln
Korean Air 20 787 $6.3 Bln
Air Lease 5 787-9 $1.5 Bln
BOEING TOTAL 226 Over $32 Bln
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BUYER ORDER PLANE LIST PRICE VALUE
Air Lease Corp. 100 A220-300 $11.4 Bln
A321XLR
A321neo
American Airlines 20 A321XLR $2.8 Bln
Cebu Pacific 31 A330neo $6.1 Bln
A321XLR
A330neo
IndiGo Partners 32 A321XLR $4.5 Bln
Saudi Arabian Airlines 30 A320neo $3.3 Bln- $3.8 Bln
A321XLR
AIRBUS TOTAL 327 Over $43 Bln
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*Total estimated values refer to all orders & commitments received, excluding purchase rights, leases, conversions
and options.
ANALYSTS HAD THIS TO SAY:
On Airbus's outlook..."Higher narrowbody production rates,
better margins on A350 and better cash dynamics on A220 and A400
underpin our expectation of multi-year earnings and cash-flow
improvement at Airbus." -GS
On Airbus's new plane..."The A321XLR launch provides [Airbus] an
economic advantage with no extra cost by adding additional range
through higher fuel capacity. Extra range opens new single-aisle
routes such as New York to Rome or London to Miami. Combined, the
middle market could command 5,500 new aircraft over the next 20
years." -Jefferies
On the 737 MAX re-certification… "Some suppliers say we're weeks
away from certification and others say it could be as late as
December...Ultimately, we don't think anyone really knows. This
appears to have moved beyond the realm of a simple technology fix
and into the realm of global certification politics." -BAML
On IAG's MAX order… "Is this a case of opportunistic buying? The
list price of the Boeing aircraft alone is $23bn-$26bn, and while
IAG has negotiated an [undisclosed] substantial discount, this
still represents a vote of confidence in the aircraft. Was a larger
discount than normal offered...and IAG took advantage of it? We see
IAG as sober, rational capital allocators rather than empire
builders and expect them to have dispassionately assessed any
incremental capex." -Bernstein
On new Boeing narrowbody… "To some extent, Boeing seems to be
using the show as an opportunity to explain what has gone wrong
with 737 MAX program. At this point in the commercial aerospace
cycle, we think the debate on Boeing should be around the launch of
the NMA [new narrowbody] or the supply chain's ability to support
the next ramp-up in 737 MAX production, not when the FAA and other
international authorities will re-certify the plane." -BAML
On the 787…"Airbus...throughout the show was vocal about
aggressive pricing in wide bodies, especially the lower end. It
also said that the market is oversupplied [or at least heading that
way]. These comments likely relate to the 787, which is producing
at 14/month--a record for wide bodies--and winning deals. A330neo
got some traction at this show, and 350 also won its share, but
combined, they deliver around150 versus 787/777 over 200."
-Citi
Write to Olivia Bugault at olivia.bugault@dowjones.com and
Fabiana Negrin Ochoa at fabiana.negrinochoa@dowjones.com
(END) Dow Jones Newswires
June 24, 2019 05:39 ET (09:39 GMT)
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