Airbus SAS scored a runaway order victory over Boeing Co. at the Paris Air Show as the revamped A320neo, launched last December, came of age with a succession of deals that climaxed with an $18 billion, 200-jet contract from AirAsia Bhd., the biggest in the company’s 40-year history.
Airbus won 418 firm orders with a list price of $44 billion, more than 16 times the worth of Boeing’s 23 contracts priced at $2.4 billion. The total of 441 sales valued at $46.4 billion shared between the companies was 86 percent higher than at last year’s Farnborough show, which alternates with the Paris event and produced 237 orders spread more evenly between the rivals.
Deals were dominated by 667 contracts or commitments for Airbus’s A320neo as airlines seeking to cut fuel costs rushed to buy a re-engined model claiming a 15 percent efficiency gain over existing single-aisle planes. Boeing, which hasn’t decided whether to upgrade its 737 or build a new jet by 2020, fared better in the wide-body market, securing 19 contracts for the 747-8 jumbo before Airbus, the No. 1 planemaker since 2003, hit back with 12 commitments for its A380 double-decker.
“Airbus had a very good show,” said Richard Aboulafia, vice president of Teal Group, a Fairfax, Virginia-based consultant. “The success of the neo has been considerably greater than expectations, and it’s pretty clear now that Boeing has got to rethink its narrow-body product strategy and timing.”
European Aeronautic, Defence & Space Co., the owner of Airbus, rose as much as 53 cents, or 2.4 percent, to 22.38 euros and was up 0.7 percent at 5:29 p.m. in Paris trading. Boeing declined 2 percent in New York trading. EADS has gained 26 percent since the start of the year, compared with Boeing’s 8.4 percent advance.
Airbus, based in Toulouse, France, also announced 312 order pledges valued at $28.2 billion, versus 88, worth $14.8 billion, at Boeing, which has its headquarters in Chicago.
“The A320neo has effectively drawn the battle lines,” Kenneth Herbert, an analyst at U.S.-based Wedbush Securities, said in a note to investors. “We estimate the potential for 1,200 competitive narrow-body orders over the next five years, based on our airline fleet composition analysis, many of which are critical for Boeing to win.”
Airbus took months deciding whether to proceed on the neo, after stretching its engineering resources too thinly on previous programs. The A380, while gaining some business at this year’s show, remains an unprofitable program that won’t break even before 2014 at best, Airbus has predicted. The double-decker jet was hobbled by production glitches and cost overruns.
Bombardier Inc., the third-biggest planemaker, won 10 firm orders for its new CSeries plane from an undisclosed buyer, together with 20 commitments from Korean Air Lines Co. The Canadian company also sold 10 of its latest Global business jets to VistaJet of Switzerland and six to Australia’s AvWest.
Still, Bombardier failed to secure an order from Qatar Airways Ltd., which said it had shelved plans to buy the CSeries while indicating that an A320 order could come before the end of the show, which runs through the weekend.
Boeing doesn’t view air shows as competitions for orders, said John Dern, a spokesman. The company had unfilled orders for 3,396 aircraft compared with Airbus’s 3,432 orders as of May, according to the planemakers’ websites.
Airline executives told Boeing that they don’t mind waiting a few years longer than a re-engined plane would take if it’s for a jet that’s 20 percent better on an operating-cost basis, Marlin Dailey, Boeing’s top commercial salesman, said in an interview. Still, the message from the show has been that “they want us to get on with the decision,” he said.
“It’s being in the grey zone that some of our customers are uncomfortable with,” he said. “That’s the pressure I feel more than anything else. This is a 30-year decision, so on an intellectual level we’ve got lots of time. On a market-based level, we need to move forward with the decision.”