Middle Eastern buyers are ready to place some large orders at Farnborough as the global aviation industry’s biggest airshow opens in the sleepy southern English town. Sources have told Reuters US planemaker Boeing would win an order of at least 20 and as many as 30 777 long-range passenger jets from Dubai’s Emirates, worth up to $7.5 billion at list prices.
Emirates airline already stole the limelight at the Berlin Air Show a month ago with an $11 billion order for A380 superjumbos from Airbus. There was also talk about the potential for orders from the fellow Gulf state of Qatar, as a source said Bombardier would announce orders for its C-Series passenger jet. Key plane buyers this week will also include Air Lease Corp, recently set up by Steve Udvar-Hazy, founder and former head of AIG plane-leasing unit ILFC, industry sources said.
The chief executive of Boeing’s commercial airplanes division said he expected the world’s second-largest planemaker to announce orders from leasing companies this week. Jim Albaugh also said he saw an “uneven recovery” in the global economy with the United States lagging, but was reasonably confident about the impact of the European sovereign debt crisis on the company’s business. The orders are part of a tentative upswing in civil aircraft demand, driven mainly by emerging markets and low-cost carriers. But lingering concerns about the broader economy were keeping many analysts cautious.
“The traffic numbers themselves are excellent, but there is all this uncertainty and doubt about the strength of the recovery in the background,” said Richard Aboulafia of Virginia-based Teal Group. Farnborough hosts a massive aviation and arms jamboree every other year, rotating with Le Bourget near Paris. Much of the real business done or prepared at the show will be in invitation-only chalets of defense companies, even though several have reduced their presence to display belt-tightening, and arms makers are bracing for heavy Western defense cuts.
The star attraction will likely be the Boeing 787 Dreamliner, a plane now in testing and built from composites. It arrived on Sunday, thrilling crowds of aviation enthusiasts and causing a fervent social-media buzz. The aircraft promises greater fuel efficiency and its lightweight materials and innovative design have captured public imagination. But glitches have delayed it more than two years.
Airbus will be showing off its A400M military transporter plane and trying to draw a line under its own delays and cost overruns with a marketing ploy over the plane’s name. Pilots nicknamed the plane “Grizzly” when it took off for the first time last December. Workers were seen spraying grizzly bear paw prints over the airfield’s grounds on the eve of the show, as Airbus prepared to baptize the test plane.
Marketing stunts, a feature of air shows, are just the tip of the iceberg in an increasingly bitter feud between top planemakers over trade, defense and jet orders. Boeing has said a World Trade Organisation report issued last month meant European nations must rectify illegal subsidies paid in the form of loans to Airbus for plane development projects. The European Union will launch an appeal against the decision this week, two sources familiar with the case said. The same companies are locked in an ill-tempered contest for a $50 billion deal to supply tankers to the U.S. Air Force and each is likely to press its case to worldwide media at the show.