Boeing back in limelight

Qatar doubles order; $18.9b commitment single biggest deal at Farnborough

By (Agencies)

Published: Thu 17 Jul 2014, 11:07 AM

Last updated: Fri 3 Apr 2015, 5:07 PM

Boeing Co, which lagged behind Airbus Group NV’s order haul on the first two days of the Farnborough Air Show, bounced back with a commitment from Qatar Airways Ltd to double planned purchases of the 777-9X model.

Qatar Airways said it wants to buy an additional 50 of the largest twin-engine model, after firming up a deal for the same number announced at the Dubai expo in November. The value of the follow-up commitment, which isn’t firm, is $18.9 billion, making it the single biggest deal yet at this year’s show.

Airbus and Boeing are facing off at the air show south of London, with an early advantage to the European manufacturer after it introduced an updated version of its A330 wide-body with more fuel-efficient engines. Both companies have mainly pulled in deals from leasing firms, with Qatar Airways and AirAsia Group Bhd on Wednesday among the few airline customers.

“This represents the largest aircraft order in our history for a single aircraft type,” Qatar chief executive officer Akbar Al Baker said in a press conference on Wednesday. “The 777s we currently have form the backbone of our fleet.”

The 777X will be introduced by the end of the decade to follow the current 777, a long-range wide-body jet that boasts the world’s largest commercial engine. Airbus has positioned its A350-1000 against the 777, though the aircraft has not won any orders or commitments so far at the air show.

“This has been a process that has been going on for some time,” Ray Conner, CEO of Boeing’s commercial airplanes unit, said of negotiations with Qatar.

Qatar will start firming up options once deliveries begin in 2020, Al Baker said. The carrier needs the new planes both to replace aging models in its own fleet, as well as for its leasing business Qatar Aviation Lease Co.

“We want to expand that business, because this is also a profit center for the airline,” Al Baker said of aircraft rental operations. “We could compete with leasing companies,” he said in an interview. “Wherever they require airplanes, we will lease.”

Seeks compensation

Qatar Airways will seek compensation from Airbus for delays in delivery of three of the European planemaker’s A380 superjumbos, the Gulf carrier’s chief executive officer said on Tuesday.

Akbar Al Baker also said at the Farnborough Airshow he was not in any hurry to sign a final order for 50 777X jets to be supplied by Boeing Co, leaving it uncertain whether the $18 billion deal would be completed at the high-profile event.

On Tuesday, Al Baker told reporters that as a result of delays in receiving A380s due in May or June, the airline had been forced either to use smaller planes or cancel frequencies.

“The loss of this has been very painful to Qatar Airways,” he said in a briefing. He said Qatar Airways was entitled to ask for compensation after a 30-day grace period for “excusable” delays which had now expired for all three aircraft.

Asked whether he would seek compensation over late delivery of the world’s largest jetliner, he said, “Yes of course.”

Sales widen

Airbus Group NV extended its lead over Boeing Co on the second day of the Farnborough Air Show, winning orders and sales agreements valued at about $38 billion at the industry’s biggest expo.

Today’s dealmaking included AirAsia Bhd.’s $13.8 billion accord to buy the new A330neo, earning chief executive officer Tony Fernandes a kiss from Fabrice Bregier, who runs Airbus’s jetliner unit. Boeing’s orders and options came to $9.6 billion, based on data compiled by Bloomberg Industries.

The A330neo’s first buyer at the show was Los Angeles-based Air Lease Corp, whose CEO, Steven Udvar-Hazy, had urged Airbus to offer the plane now known as the A330neo. Air Lease also booked an order for 60 of Airbus’s single-aisle A321 model.

AerCap Holdings NV said it would buy 50 A321neos worth $5.14 billion, the first jet purchase since the world’s biggest independent aircraft lessor bought Hazy’s former company, International Lease Finance Corp, for $7.6 billion in May. An $11.8 billion purchase of A320-family planes by SMBC Aviation Capital Ltd. was Airbus’s biggest single-aisle order from an aircraft lessor.