Airbus Edges Boeing In Latest Duel
Airbus Industrie sold $4 billion in new jets Wednesday, giving the European planemaker a sizable victory over the Boeing Co. in their latest air show order duel.
The new firm orders for Airbus brought it $6.7 billion in sales, based on list prices, compared to about $5.2 billion for Boeing, after three days of Farnborough International 98.
Both planemakers also got more potential new business as customers from the United States, Latin America and Europe took out options to buy additional jets. Boeing and Airbus each said they anticipated no more big deals to be announced by the end of the weeklong show that is the industry's top event of the year.
Airbus chief executive Noel Forgeard landed an important new customer, United Parcel Service, in what has shaped up as the biggest deal of the show, the UPS placed orders for 30 Airbus cargo jets and has options on 30 more. The deal could be worth about $5 billion if all of the airplanes are delivered. It was the first-ever order of Airbus jets by Atlanta-based UPS.
Seattle-based Boeing sought to play down the air show numbers, after carefully adding up its own to make the total as high as possible.
"This comes and goes, and really you have to look at it over a period of time," spokesman Mark Hooper said.
Airbus has claimed it is moving close to parity with Boeing in terms of new orders. Boeing says it will deliver more than twice as many airplanes as Airbus this year, while capturing 70 percent of the global business in dollar terms.
All of the airplanes sold this week may become part of a pattern that spells trouble in the industry, analysts warn.
The airlines are booming, and experts say they will end up buying too many airplanes, as they often have in the past, only to run into problems in a few years as traffic slows. Analysts predict the current aircraft sales surge will end in about a year, giving way to a leaner period.
But with jets soaring above Farnborough's hospitality tents and free drinks flowing, the planemakers seemed intent on letting the good times roll as long as possible.
Also Wednesday, Airbus announced a $1.5 billion firm order from a U.S. leasing company, General Electric Capital Aviation Services, a subsidiary of GE Capital.
Boeing had a somewhat slower day, at a show where much attention has been focused on its recent assembly line problems and a management shakeup.
One of Boeing's more colorful deals was a memorandum of understanding - not a firm order - to sell one big 747-400 to a startup Sri Lankan carrier called PeaceAir that plans, among other things, to fly religious pilgrims to holy sites.
"Peace begins with a smile," said PeaceAir's chairman, Gamini Wethasinghe, his voice choking with emotion as he described plans to give 80 percent of profits to charity. "When PeaceAir starts, we hope to bring peace and joy."
Any thoughts of peace soon gave way to har commerce.
Boeing reported $1.67 billion in jet orders from GE Capital, which is taking 12 of Boeing's longhaul 767 models. Boeing also said it sold five 737-800s in a deal listed at about $255 million to the San Francisco aircraft leasing company GATX Capital Corp.
Boeing said earlier it had gotten five new orders for 737s from Scandinavian Airlines System, which also is converting 11 options into firm orders in a $600 million deal.
A Boeing regional vice president, Tom Basacchi, said Boeing was doing well outside its home turf, saying the 737 orders from SAS "reaffirms that we have the right product for the European market."
Written by Dirk Beveridge