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Abu Dhabi, UAEFriday 17 August 2018

Farnborough Airshow: Boeing and Airbus vie for deals on first day

Aviation giants bag deals worth about $17.4bn, while Embarer clinches $1.1bn order from United 

British Prime Minister Theresa May walks up the steps of an Airbus aeroplane as she opens the Farnborough Airshow. Getty Images
British Prime Minister Theresa May walks up the steps of an Airbus aeroplane as she opens the Farnborough Airshow. Getty Images

Global jet makers kick started Farnborough International Airshow with about $18.5 billion (Dh68bn) worth of the deals struck with airlines, and transport and courier companies on day one of this year’s biggest aviation industry event.

Apart from beefing up their orderbooks, aircraft manufacturers and aviation industry suppliers use opportunities like Farnborough to showcase their latest technologies and float ideas for new aircraft to global airlines. Farnborough in the UK alternates with the Paris air show. The biannual Dubai Airshow is another aviation industry showcase where manufacturers vie for business, largely from Middle Eastern carrier such as Emirates in Dubai and Etihad Airways in Abu Dhabi.

Chicago-based Boeing has come up on top so far this year. The company has 460 net aircraft orders in the first half of 2018, compared with Airbus’s 206. The US manufacturer has bounced back after losing that race to its European rival last year. The race is heating up and could change direction later this year if Airbus manages to bag deals such as a 100 aircraft agreement with AirAsia worth $23bn.

International express courier firm DHL on Monday placed a $4.7bn order for 14 Boeing 777 freighters and purchased rights for seven additional aircraft. The deal will double the amount of 777’s DHL has at a time when air freight demand grew by almost 10 per cent last year.

“Expanding cross-border e-commerce sales for instance will grow to $4.48 trillion by 2021, which means a growth of 19.2 per cent per year. DHL's investment in the 777 Freighters is a direct answer to the growing demand for global express capacity,” said Charlie Dobbie, executive president of global network operations and aviation at DHL.

The deal is significant as it will not only modernise the company's long-haul fleet with fuel efficient freighter but will be a major step towards DHL's zero emissions target by 2050, the company said.

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Aircraft leasing company Jackson Square Aviation also struck a deal with the US aircraft manufacturer. JSA agreed to buy 30 737 MAX 8 aircraft Boeing, worth roughly $3.5bn at list price, Boeing said.

The deal marks JSA’s first direct purchase from a jet maker and makes the leasing firm the 100th customer of the 737 MAX programme. The 737 MAX is Boeing's fastest-selling airplane having taken more than 4,600 orders – despite only being launched in August 2011.

JSA said it expects to take delivery of the aircraft between 2023 and 2025. The San-Francisco-based lessor was founded in 2010 and has built a fleet of 180 jets by purchases through sale-leaseback financing and pre-delivery payment financing agreements.

Airbus, Boeing's chief global competitor, in the meantime, inked a memorandum of understanding with Taiwanese start-up StarLux Airlines for 12 A350-1000 wide-body aircraft and another five of the smaller A350-900 type in a deal worth around $6bn, the France-based company said.

Airbus also struck a deal with China's Sichuan Airlines, which agreed to buy another 10 A350-1000’s, worth about $3.2bn, according to the European aircraft manufacturer.

Meanwhile Embraer, the third-largest manufacturer of civilian aircraft, said it clinched a $1.1bn deal with United Airlines for 25 E175 jets in a 70-seat configuration.

Deliveries would begin in the second quarter of 2019, Embraer said in a statement.

The deal takes the number of E175s to airlines in North America since January 2013 to 420 planes, accounting for more than 80 per cent of all orders in the 70-to-76-seat capacity jets, it added.

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