Rivals Boeing and Airbus scooped up orders for new planes worth $23 billion dollars yesterday from airlines and leasing firms seeking to meet soaring Asian demand for air travel.
The Farnborough International Airshow took off with a rush of firm orders for 192 short and long-haul passenger jets worth a total of $23.3 billion (18 billion euros).
The biggest single order came from Dubai airline Emirates for 30 Boeing long-range 777 aircraft worth a combined $9.1 billion.
General Electric’s aircraft leasing unit agreed to buy 40 single-aisle 737-800 planes worth $3.0 billion from US aerospace giant Boeing.
GE Capital Aviation Services also bought 60 A320 single-aisle planes with a catalogue price of $4.5 billion from Boeing’s fierce European rival, Airbus.
Airbus won a $4.4-billion order from new US group Air Lease Corporation (ALC) for 51 A320 jets while Russian airline Aeroflot confirmed it was buying 11 long-haul Airbus A330-300 carriers worth $2.3 billion.
“The leasing companies are looking, to not only an upturn in Western European and US markets, but they are also seeing the opportunity in emerging markets,” independent aviation analyst John Strickland said.
“There’s strong demand for aircraft coming through from not only the Middle East but other parts of Asia and in particular China so getting those aircraft on the books now... really is placing them in a strong position to take advantage of that upturn and the growing economies in the years to come.”
Mr Strickland added that leasing planes provides an airline with “a degree of flexibility”.
“On the one hand it doesn’t necessarily need the same cash to acquire the aircraft and depending on how they agree the lease, it may give them more flexibility to get out of the commitment of those aircraft in their fleet more easily than if they owned them.”
Although the 192 planes ordered yesterday are together worth more than $23 billion, customers traditionally receive large discounts on the list price of each plane when the orders are of a certain size.
Emirates chief executive Sheikh Ahmed bin Saeed Al Maktoum said his decision to expand the airline’s 777 fleet reflected plans to grow its “expansive global network, which already spans six continents.
“It also demonstrates our commitment to operating a modern fleet that not only enhances the passenger experience but our operational efficiency as well.”
Only a month ago, Emirates agreed to spend $11.5 billion on 32 Airbus A380 superjumbos – the biggest single contract in civil aviation history and a deal which confirmed it as the world’s most bullish airline.
Explaining the reason behind ALC’s purchase of 51 short-haul Airbus jets, chief executive Steven F. Udvar-Hazy said: “In today’s airline world, low operating costs, fuel efficiency, environmental friendliness and maximum operating flexibility are important ingredients.
“The latest versions of the Airbus family of single aisle aircraft meet and exceed those high standards.”
The Farnborough show near London is one of the aviation world’s biggest trade events and renowned for being an arena for major deal announcements.
Boeing will be hoping to secure more orders here for its mid-sized 787 Dreamliner – a fuel-efficient jet which will be on display in Farnborough after making its first flight outside of the US on Sunday.
The plane, which can fly very long distances and seat up to 330 passengers, has been beset by production delays.
Jim Albaugh, chief executive of Boeing Commercial Airplanes, said on Sunday the company hoped to deliver the first Dreamliner to launch client All Nippon Airways not later than January.
Airbus is working on a new long-haul plane of its own – the A350 XWB (Extra Wide Body). Another big project for Airbus is its long-delayed A400M military transport plane, which made a flypast at Farnborough.
The Farnborough show also traditionally sees the announcement of orders for military jets but with governments set to slash defence budgets to help reduce huge public deficits, major deals may be scarce.
Facts and figures
• The show is the 47th held at the Hampshire airfield and there will be 1,300 exhibitors and around 120,000 trade visitors;
• Around 100,000 people work in civil aerospace in the UK, which generates £22 billion a year in a sector which enjoys a 17per cent global market share;
• 300,000 people in the UK are employed in the defence industry, which has a turnover of more than £35 billion a year and has 10 per cent of the global defence market, including 21 per cent of the global export market;
• 4,000 defence personnel are working with UK troops in Afghanistan;
• The security industry employs around 600,000 people in total in the UK and the diverse UK national security budget is worth an estimated £43 billion;
• Around 70,000 are employed in the space industry, which generates £7 billion a year;
• The space sector in the UK grew 9% a year between 1999 and 2007 and it is likely to grow from £6 billion in 2008 to £40 billion by 2030;
• Carbon dioxide emissions from aircraft today are 50 per cent less than they were 50 years ago, while planes are 75 per cent quieter than 30 years ago;
• US planemaking giant Boeing reckons world airlines will need almost 31,000 new aircraft over the next 20 years;
• Just four per cent of the planes flying with European carriers are likely still to be in service by 2029;
• The Boeing 787 Dreamliner passenger aircraft which is being shown off at Farnborough has engines made by Rolls-Royce;
• Other parts of the Dreamliner were made at a number of UK facilities including Bournemouth, Sheffield, Southend-on-Sea in Essex and Crawley in West Sussex;
• The wings of the Airbus A400M military aircraft – also making its debut at Farnborough – were made at Filton in Bristol.