Military
Boeing Firms Up Another Order, Airbus Still at the Starting Line
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The second day of the Dubai Air Show has not generated a lot of heat or light for either of the two major manufacturers of commercial aircraft. Boeing Co. (NYSE: BA) finalized an order for 20 737-8s that it announced as a commitment at the Paris Air Show in July, and Airbus said it had signed a contract to provide maintenance support for a Chinese carrier that has ordered four of the company’s A350 XWBs. Be still my beating heart.
The Boeing deal with a Kuwait-based leasing company is valued at $2.2 billion, using list prices for the new planes. The Airbus deal with China’s Sichuan Airlines does not specify a dollar amount.
The story here remains Boeing’s announcement on Sunday of an order for 40 787-10 Dreamliners from Emirates airline. The UAE-based airline cancelled an order for 70 Airbus planes in 2014, and Airbus competed hard to win back the deal, but it didn’t work out that way.
Now the only suspense is whether Emirates can persuade Airbus to make enough of the airline’s desired upgrades to the superjumbo A380 to generate a big order for the planes. Emirates has said in the past that it would order up to 200 of the planes that carry a list price of $436.9 million apiece if Airbus would put a new engine on the plane. That is not likely to happen — too expensive — for what appears to be the last remaining customer for the gigantic plane.
Boeing also released this morning an updated market forecast for new airplanes in the Middle East. The total number of new planes is 3,350 at an estimated value of $730 billion.
Twin-aisle airplanes are expected to make up nearly half (1,500) of the new airplanes in the Middle East, and more than 70% of the value at $520 billion. Both percentages are significantly higher than the global average.
More than half of the total deliveries in the Middle East will be single-aisle airplanes. Operators in the region will need 1,770 single-aisle airplanes valued at $190 billion, driven by the growth of low-cost carriers.
Boeing does not even include four-engine planes like the A380 and its own 747 in the long-term forecasts. Boeing’s position has been consistent for several years now that a market for those planes is too small to justify the cost of either building a new plane or upgrading the current models.
One last note from Dubai: Lockheed Martin Corp. (NYSE: LMT) signed a $1.65 billion deal with the UAE armed forces to support an upgrade contract for the country’s F-16 Desert Falcon fighter planes.
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