Aircraft manufacturers announce deals at Farnborough air show

Airline Industry Information, July 25, 2000

AIRLINE INDUSTRY INFORMATION-(C)1997-2000 M2 COMMUNICATIONS LTD

With the commencement of the air show in Farnborough, Britain on 24 July the two major aircraft manufacturers, Airbus Industrie and Boeing Co, have announced several lucrative deals.

Perhaps the most important of deals, for Airbus Industrie at least, has been the securing of firm orders from Air France and Emirates of Dubai, for its new A3XX superjumbo jet aircraft.

The viability and demand for the 555-seat aircraft has been controversial, with US aircraft manufacturer Boeing Co claiming that market for such large aircraft is small, while Airbus Industrie has firmly debated and forecast that there is sufficient demand.

Airbus Industrie has now received its first orders for the aircraft, with Emirates placing firm orders for seven A3XX, including two freighters. Emirates has also announced options for five more aircraft. The total deal is valued at about USD1.5bn and Emirates is expected to take delivery of the first A3XX in February 2006.

Air France meanwhile has placed an order for ten A3XX aircraft, stating that it believes the aircraft 'will be a key asset for all airlines who choose it' and that it will be very profitable. Air France's views mirror comments made by the chairman of Emirates, who also stated that there was a need for the aircraft.

Boeing Co continues to maintain that the market for superjumbo aircraft like the A3XX is not large enough to warrant the development of a completely new aircraft on its part and restated that it would be proceeding instead with its USD4bn upgrade of the 747 aircraft. The modifications to the 747 will increase its passenger capacity to 524 and allow it to fly further.

Boeing Co also clinched several deals on the first day of the air show and announced a USD1.02bn order from All Nippon Airways of Japan, as well as a USD5.5bn deal with GE Capital Aviation Services, an aircraft lessor, for the purchase of 80 Boeing aircraft.

GE's order also includes options for 59 aircraft plus purchase rights for another ten. International Lease Finance Corp has also placed an order for 40 Boeing jet aircraft, including 33 777 aircraft and seven 737s.

Airbus Industrie has also received orders for aircraft other than its A3XX, with CIT Group Inc, a US finance company, agreeing to purchase 32 A320s and 15 A330 aircraft in a deal valued at about USD3.6bn according to Reuters. Airbus Industrie has also indicated that it is expecting to receive about 500 orders before the end of 2000, with some 200 expected at the Farnborough air show.

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