Boeing may waver if Airbus steals show – ILFC

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Boeing could be forced to acknowledge Airbus is right about a key concept of aircraft design if its rival mounts a sales coup at the Paris Air Show, the head of the world’s top aviation lessor said.

The two planemakers are locked in a strategy battle over a huge market for medium-haul aircraft, with Airbus marketing a revamped version of its A320 and Boeing holding back on deciding whether to upgrade or redesign its 737.

Boeing has said it could follow Airbus in fitting new engines on the 737 to make it more efficient from 2016 onwards, but that it doubts this would be radical enough for airlines.

It appears to back a bolder redesign that would be ready in around 2019 and says it will make its mind up before year-end.

But Henri Courpron, chief executive of International Lease Finance Corp, the world’s largest aircraft leasing company, told Reuters the outcome of this week’s Paris Air Show could affect the message Boeing is hearing from customers — including ILFC.
“I think it is going to be a different conversation at the end of the week, depending on what Airbus achieves this week in terms of orders for the neo,” Courpron told Reuters.
“So if we assume, based on rumours and reports, that the neo is going to be a great success this week, then it prompts Boeing to do something. It cannot do nothing,” he said.

If he is proved correct, that may be a bitter pill for Boeing to swallow, though Airbus has also in the past been forced to back down over significant bets on aircraft design.
“It validates the Airbus theory that you do not need to redesign an aircraft completely to enjoy significant success in the market place,” Courpron said in an interview.
“So I think it should help Boeing come to a decision and maybe the decision is not as dramatic as the one they have been advertising for a number of months.”

A Boeing spokesman said the company was evaluating its options for the 737 narrowbody segment while talking to customers, and would not be driven by what happens at Airbus.

Boeing’s European rival is lining up what could be hundreds of orders for the A320neo, which boasts a 15 percent gain in fuel efficiency compared to current models.

So far at the major air show, Boeing is concentrating on orders for wide-body jets including the 747-8 stretch jumbo.

ILFC has a fleet close to 1,000 aircraft and is one of the largest owners of 737 aircraft, which it leases to airlines.

ILFC earlier this year ordered 100 aircraft of the A320neo family and yesterday it placed an order for 120 Pratt & Whitney engines to power 60 of those airplanes, plus 40 options.

Courpron declined to say whether ILFC would top up the deal with an order from Pratt & Whitney rival CFM, an engine venture owned by General Electric and Safran.

Boeing and Airbus are also skirting around each other in another crucial market for wide-body two-engine jets like the Boeing 787 or 777 and Airbus A350. Aviation executives say decisions in the two main segments of the market are probably intertwined.

Airbus this week delayed the introduction of its 350-seat A350-1000 by 18 months to mid-2017 as engine supplier Rolls-Royce beefs up the engine. The move is targeted at winning sales from the 365-seat 777 which reigns unchallenged in a narrow but lucrative segment of the long-range market.
“I think there is a lot of market testing going on and it is true from all manufacturers,” Courpron said.
“You launch an idea, you start talking about something and you see how the market and competition react, and then you use that market feedback as an input in your decision making.”

Courpron said ILFC, owned by bailed-out U.S. insurance giant AIG, would buy more aircraft when the time was right.



Boeing captured attention with a sale of 17 Boeing 747-8 airplanes to an unidentified customer yesterday, but Courpron said ILFC was not interested in that particular model. ILFC this year cancelled an order for 10 competing Airbus A380s.