Paris jinx grounds planes but deals soar


Airbus faced the unexpected and daunting task today of delivering a marketing blow to rival Boeing and maintaining momentum for a revamped jet with its two flagship planes grounded at the Paris Air Show.

The European planemaker has targeted an order surge worth tens of billions of dollars, but was left reeling as the world’s largest aviation event was jinxed by a series of mishaps including a taxiway collision involving the A380 superjumbo.

The right-hand wing-tip of a test plane for the world’s largest jetliner, with a wingspan of almost 80 metres (yards), scraped a building at Le Bourget airport yesterday and was withdrawn from the air show’s traditional flying displays.

A second aircraft, the delayed European A400M airlifter, was also withdrawn from air display after a gearbox problem but will be allowed to perform in a flypast when French President Nicolas Sarkozy inaugurates the biennial event today.

The A380 collision caused dismay hours after the arrival of its new rival — Boeing’s elongated 747-8 superjumbo which is showing its distinctive silhouette abroad for the first time.

The latest version of the legendary 747 jumbo touched down in orange and red “sunrise” livery symbolising the importance of Asia, whose economic growth is set to dominate aviation in coming years starting with this week’s air show.

Industry sources expect some sales of both the A380 and 747-8 during the June 20-26 event but the main joust for market share concerns narrow-body, medium-haul 150-seat planes.

The air show could bring two record deals on successive days as Airbus tries to woo buyers for a revamped A320neo with more efficient engines, saving airlines 15 percent in fuel costs.
“We clearly believe in the business case and the orders you are going to see at the show are going to be astounding,” said David Hess, chief executive of engine maker Pratt & Whitney.

Buyers are already camped out in Paris hotels to negotiate the final details of major deals but are aware that Airbus has staked a lot on winning a slew of orders for the A320neo at the Paris show, and some are said to be digging in their heels.

A US$16 billion provisional deal from IndiGo to buy 180 A320neo passenger jets, first announced in January, was mired in further negotiations that could spill beyond the air show.

The deal if finalised would set a record for the number of planes in one transaction. But sources say if all goes to plan it is set to be eclipsed by a 200-plane order being fine-tuned between Airbus and Malaysia’s AirAsia.

Demand for aircraft is on a sharp rebound driven by demand from Asia’s rapidly growing airports and the Middle East.
“Those two markets will enjoy at least one-third if not more of the demand increase for global air traffic in the next decade,” said Philip Toy, a managing director at Alix Partners.

The Airbus A320neo has also benefited from airline concerns about fuel costs. Boeing said yesterday it would decide by end-year whether to upgrade its 737 with new engines from about 2016, as Airbus has done, or build an all-new jet in 2019.
“They will sell hundreds but it is hard to tell what is gross and what is net, what is a conversion from an earlier order. There are myriad complications,” said Teal Group analyst Richard Aboulafia said of the A320neo.

Orders are likely to include a confirmation of an US$8 billion 100-plane order from leasing giant ILFC and another plane order for both Airbus and Boeing planes another big lessor, GECAS.

But it could be Boeing that grabs attention on day one of the show with a sale of 777 wide-body airplanes to Qatar Airways — a reminder that the two planemakers are battling for market share on a second front after Airbus revamped its A350.

Russia and China will flex their muscles as potential rivals to Airbus and Boeing, especially during a Tuesday visit by Russian Prime Minister Vladimir Putin and some analysts expect surprise sales. But Western planemakers say it will be some time before newcomers mount a serious challenge in civil aerospace.