Gulf plane orders to ease oil price gloom
A major order for up to 100 planes from Abu Dhabi’s Etihad Airways to be split between Airbus and Boeing looked set to dominate the opening of the Farnborough air show on Monday, easing gloom at the industry’s top showcase event over high oil prices.
Signalling possible deals with both planemakers, the airline set up two conferences hours apart for what it called a major development as it follows in the path of other fast-expanding Gulf airlines like its neighbour Emirates Airlines of Dubai.
Etihad said before the show that it would soon order 50 to 100 planes, but the industry is betting on the higher number.
High oil prices have opened a schism in aircraft demand between dozens of Western airlines struggling to avoid bankruptcy and a new breed of majors from the Gulf, backed by oil wealth and driven by a concerted push to develop the region as a crossroads for globalisation by investing in large fleets.
Qatar Airways is expected to buy Airbus jets this week.
Industry sources say one could include some business for the Airbus A380 superjumbo, whose production problems have pushed the world’s largest jetliner two years behind schedule.
Airbus is talking up its fuel efficiency to appeal to the boardrooms of airlines worried about soaring fuel bills, but Boeing says the industry hardly needs many 525-seat planes.
Also seen lining up large orders is International Lease Finance, one of the world’s largest leasing companies.
It is looking to scoop up competitively priced planes to lend to airlines unwilling or unable to cough up for airliners outright as the industry enters a downturn, executives said.
The aviation jamboree, held on alternate years in Farnborough and Paris, has been overshadowed by a United States-led slowdown and the global credit crisis, hitting cash-starved airlines just as oil prices soar above $140 a barrel.
Analysts say Airbus and Boeing will struggle to reach half the 600 firm orders rung up at a record Paris air show this time last year. EADS unit Airbus is expected to post most orders since Boeing does not save them up for air shows.
Still, Boeing has 248 orders from undisclosed airlines on its books, including 180 single-aisle aircraft that could appeal to lessors. Some buyers’ names could emerge at Farnborough.
The air show will be deprived of a Bastille Day showdown between Toulouse-based Airbus and its US arch-rival Boeing.
Europe’s Airbus unexpectedly cancelled its main conference for the first day, preferring to wind up the event on Thursday when most executives and journalists have gone home.
The traditional opening joust in near-simultaneous press conferences increases the gladiatorial atmosphere of a show in which millions are spent on polishing corporate images.
Airbus and Boeing had their dominance of the market for planes with over 100 seats challenged on Sunday when Canada’s Bombardier launched a 110-130 seat jet, the CSeries.
A small artificial town of purpose-built hospitality chalets and pavilions has sprung up overlooking the runway at Farnborough, which is celebrating its 60th air show anniversary.
In a reminder of tensions overshadowing this year’s event, a business jet in Israeli Air Force colours manoeuvred onto the tarmac on Sunday packed with eavesdropping equipment in long, bulbous side panels. The converted Gulfstream jet is only on display but it could play a part in any Israeli attack on Iran following that country’s missile tests in the Gulf last week.
The usual deafening flying displays usually barely distract from deal-making in the first half of the week-long event, but Farnborough will come to a halt on Monday for the Lockheed Martin F22 Raptor, making its international show debut.
If the weather is good, its one-off display will include a manoeuvre called a “tail-slide” in which the pilot shoots nearly straight up, then lets the sleek plane drop without stalling.
For this display, the world’s arms buyers present at the show can leave their cheque books in their pockets. The radar-dodging plane, widely considered the world’s most advanced fighter, remains off limits for export from the United States. - Reuters