Airbus, Boeing Secure More Than $75 Billion in Plane Orders -- 2nd Update
15 Novembre 2017 - 11:05AM
Dow Jones News
By Doug Cameron
Airbus SE and Boeing Co. secured more than $75 billion in
single-aisle plane commitments Wednesday, demonstrating unrelenting
appetite for their most popular planes from discount carriers as
the airlines lock in deals to support growth for years to come.
Airbus secured what it called one of the biggest aircraft deals
in its history with a 430-jet agreement with airlines linked to
Indigo Partners LLC, a U.S. private-equity group with stakes in
some of the fastest-growing low-cost carriers on three
continents.
The proposed deal, announced Wednesday at the Dubai Airshow,
carried a sticker price of almost $49.5 billion before the
customary discounts that can reduce the true value by 50% or more,
though consolidation in the airline and finance industries is
giving buyers more clout.
Boeing followed shortly after with a deal to sell Dubai-based
Flydubai up to 225 more of its 737 Max 8 planes at a list price
value of $27 billion. The deal is for 175 firm commitments with
purchase rights for more, Boeing said.
Airbus and Boeing are aggressively boosting production of these
single-aisle planes to satisfy demand. Executives at both
manufacturers in recent months have said they could build more
planes. Demand is there, they say, though there are concerns
suppliers may struggle to keep pace with the torrid pace of
production.
Airbus said the Indigo Partners deal tops one by other budget
airlines AirAsia and India's unrelated IndiGo, making the financial
investor its biggest customer by list price.
Indigo, based in Phoenix, is led by industry veteran Bill
Franke, who has invested in a number of carriers including holdings
in Frontier Airlines in the U.S., Hungary's Wizz Air Holdings PLC
and Mexico's Volaris. It also backed JetSmart, a new Chile-based
carrier that launched this year.
The preliminary agreement covers 430 planes--73 A320neos and 157
of the larger A321neo model--doubling the potential orders from the
four Indigo-linked airlines.
Denver-based Frontier plans to take 134 jets, with
Budapest-based Wizz receiving 146 planes. Volaris would receive 80,
with 70 for startup JetSmart.
The European manufacturer has trailed rival Boeing Co. in
securing new orders this year, garnering more than 300 before
Wednesday's announcement, compared with more than 600 for its U.S.
rival.
It is unusual for airlines to order aircraft jointly, though
Dubai's Emirates Airline and Qatar Airways cooperated as launch
customers for the Boeing 777X at the 2013 Dubai Airshow.
Indigo didn't disclose when first deliveries were due to start,
or what engines they would choose. The Pratt & Whitney unit of
United Technologies Corp. and a joint venture between General
Electric Co. and Safran SA offer rival engines.
Airbus and Boeing both have backlogs for their single-aisle jets
stretching five or more years, even though both are boosting
output.
Deals of this scale have become more commonplace in recent
years, in part because of the explosive growth of low-cost
carriers.
However, analysts are cautious on whether some of the big
customers will take all of their planned jets on schedule,
particularly if an economic downturn slows traffic growth. Plane
makers can boost profits by agreeing to defer aircraft
deliveries.
Gus Kelly, chief executive of aircraft lessor AerCap Holdings
NV, this week said placing aircraft orders often represents a
career highlight for some airline CEOs. Speaking at an investor
conference, Mr. Kelly said that some of these orders had served
only to benefit the shareholders of Airbus and Boeing.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
November 15, 2017 04:50 ET (09:50 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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