Boeing Extends Paris Air-Show Lead With Record Aercap Order

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Boeing Co. extended its lead over Airbus Group SE on the second day of the Paris Air Show, pulling in the biggest deal yet at the expo with 100 single-aisle planes that gives it almost twice the haul of its arch-rival.

The order, by leasing company Aercap Holdings NV, is for 100 737 MAX 8 aircraft valued at about $10.7 billion at list price. The accord is the biggest transaction yet at the trade show by numbers and value, as both manufacturers seek to maintain their momentum and unveil more deals in the next days.

The accord, which Aercap said was “intensely” negotiated over the course of last year, gives Boeing a tally of about $29.6 billion in total, almost double Airbus’s $15 billion. The advantage is a surprise lead for the U.S. manufacturer, which typically trails Airbus at the Paris Show, considered the European manufacturer’s home turf.

“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.

Aercap Chief Executive Officer Aengus Kelly said the deal came together in the final days before the show, with Boeing telling the leasing company that it wanted to “make this happen.” Aercap is also interested in the larger 737 MAX 9 to help replace aging models in its fleet, Kelly said in an interview after the signing.

Boeing also announced another purchase agreement for the 737 MAX 8 on the second day, for 10 units by SMBC Aviation Capital.

Emerging Markets

Emerging-market carriers including PT Garuda Indonesia, Saudi Arabian Airlines and Qatar Airways Ltd. went shopping for long-haul jets, a sign of faster travel growth in those regions than elsewhere. Heading into the Paris expo, analysts had played down sales prospects for Boeing and Airbus wide-bodies.

Embraer SA extended its advantage over Bombardier Inc. in regional aircraft, winning firm jet orders for $2.6 billion from customers including lessor Aircastle Ltd. and United Continental Holdings Inc.

Bombardier had one customer, Deutsche Lufthansa AG’s Swiss unit, convert a CSeries order to take 10 of the larger version of the new plane instead of the smaller CS100, and another, Canada’s WestJet Airlines Ltd., exercise options to add five Q400 turboprops.

Production Pipeline

Garuda signed up for 30 Airbus A350s and the same number of Boeing 787-9 Dreamliners together worth almost $17 billion, while Saudia, as the Arab carrier is known, placed the first order for a regional version of the Airbus A330. Qatar Airways bought 10 of Boeing’s upgraded 777X plus four 777 freighters, valued at a combined $4.8 billion.

The A330s and 777s “may have come with favorable terms” as Airbus and Boeing seek to fill up available assembly-line slots ahead of planned transitions to newer models, said George Ferguson, a Bloomberg Intelligence analyst.

“Boeing and Airbus seem to be aggressively trying to close the production gap for the A330 and 777s, thus the sales of these wide-bodies today,” Ferguson said.

Garuda’s Dreamliner deal has a list price of about $7.7 billion, while the A350 component is worth more than $9 billion. The Asian carrier also wants 30 single-aisle 737 Max 8 planes worth about $3.2 billion, with the deals all outline orders.

Regional Wide-Body

Saudia’s announcement covers 20 A330-300s valued at about $5 billion, plus 30 single-aisle A320s with current-generation engines. Qatar’s 777-8X deal follows an earlier one for 50 -9X aircraft, while the 777 freighters will take the fleet to 12.

Customers typically get steep discounts on aircraft orders and don’t pay full list prices.

Boeing also announced Monday that Eva Airways Corp. of Taiwan intends to purchase five of the 777 cargo planes worth more than $1.5 billion at list prices.

General Electric Co.’s leasing unit agreed to buy 60 A320neos, the updated version of the A320 featuring new engines. That deal has a list value of about $6.4 billion. Lessors are prized buyers because they place planes with multiple customers. GE Capital Aviation Services has previously bought both Maxes and A30neos, while AerCap has neos on its books but only older Boeing 737s. GE is the sole engine supplier on the Max.

Among the first leasing companies to place orders at the show was Air Lease Corp., run by Steve Udvar-Hazy, which said it will buy one additional A350-900, as well as one of Airbus’s current A321s and three A320s.

For more on the 2015 Paris Air Show, go here: Special Report

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