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Boeing, Airbus said to Near $23 Billion orders In Paris


Boeing Co. and Airbus Group SE are poised to win at least 220 orders for competing narrow-body jets at the Paris Air Show, a haul of at least $23 billion, people briefed on the matter said.

Single-aisle models such as the 737 and A320 are the workhorses of the global airline industry, carrying about 75 percent of passengers. The Max and neo are the latest, upgraded versions of each plane, making them a focal point for the jockeying between the world’s largest planemakers.

Press conferences to unveil their orders are scheduled to begin on Monday, when the Paris event formally opens. The deals would provide a sales boost in a year in which manufacturers are focused on efficiency gains rather than the new-model debuts that typically drive big orders.

“There is such a long lead-time for these aircraft at the moment that people are scared of missing out,” Mike Hawkins, managing director of consultant Aviation Asset Management Ltd., said by phone from Auckland. “They’re probably planning for a good eight years ahead with some of these orders, and who knows what oil prices will be then?”

The largest transaction could be for 100 Maxes for lessor AerCap Holdings NV, people familiar with the matter said. That order would be valued at more than $10 billion, based on the $106.9 million list price for the Max 8, the top-selling model.

GE Leasing Unit

Airbus is close to a sale of 60 A320neos to General Electric Co.’s leasing unit, the people said. Lessors are prized buyers because they place planes with multiple customers. GE Capital Aviation Services has previously bought Maxes and the neo, while AerCap had neos on its books but none of the Max. GE is the sole engine supplier on the Max.

Lessors may dominate the buying because “airlines probably want to just take the cash at the moment and give it back to shareholders for a change,” Hawkins said. “If the manufacturers have holes in their production schedule they’ll be able to give the lessors a bit of a discount.”

AerCap, the largest independent lessor, would fill a gap in its lineup with a Max order. The Netherlands-based company would need to buy about 300 Max jets over time to replace its fleet of older-model 737s, Chief Executive Officer Aengus Kelly said in a March interview.

Korean, Saudia

The Max is the latest version of Boeing’s top-selling 737 and is due to enter service in 2017. Airbus has scheduled the neo’s debut for later this year.

Korean Air Lines Co. plans to acquire 30 Boeing Maxes, along with 30 A320neos, the people said. Airbus is also lining up a separate A320neo deal with Saudi Arabian Airlines, the people said. Saudia, as the Jeddah-based carrier is known, is looking to buy Airbus A330 wide-bodies, too, the people said.

The A320neo retails for $106.2 million. Airlines and lessors typically buy at a discount to list prices.

Spokesmen for Boeing, Airbus and AerCap declined to comment. A message left for comment with Gecas wasn’t immediately returned. Officials at Saudia couldn’t immediately be reached.

Sales of single-aisle jets such as the 737 are booming growing middle classes in emerging markets travel more. The models are the backbone of the world’s airlines, carrying about 75 percent of passengers and are favored by low-cost carriers.

Source: Bloomberg