The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Singapore / AFP
Airbus and Boeing announced billion-dollar deals at Asia’s largest airshow in Singapore on Wednesday, underscoring the region’s role as a driver of industry growth despite greater caution among plane buyers.
Europe’s Airbus said it had won an $1.85 billion deal for the purchase of six A350-900s by Philippine Airlines (PAL), the flag carrier of one of Asia’s fastest-growing economies.
US-based Boeing meanwhile said it had won a commitment from China’s Okay Airways to buy 12 aircraft for $1.3 billion despite a weakening Chinese economy.
“The Chinese people are very good at saving,” Okay Airways chairman Wang Shusheng told reporters. “It doesn’t matter if the economy has worsened, they will still travel.”
Tony Tyler, director-general of the International Air Transport Association, said ahead of the Singapore show that airlines in the region may try to push back their orders due to softer profits.
Airline savings from low fuel costs are being eroded by hedging losses and a strong dollar, Tyler said, noting that the greenback climbed 20 percent over the past 18 months.
With Asia-Pacific accounting for 40 percent of global air cargo, regional carriers have been badly hit by the global economic slowdown, worsening the impact of competition from Gulf carriers, the IATA chief added.
“We want to sell as many aircraft in Asia as much as possible but we also want to settle in Asia and have industrial facilities, research and engineering centres,” Marwan Lahoud, chairman of the French aerospace industries association GIFAS, said in an interview on Tuesday.
“We want to amplify what we have started already — selling, designing and manufacturing in Asia,” said Lahoud, who is also a member of the group executive committee of the Airbus Group.
Industry players say travel demand in Asia is still there, boosted by the region’s growing middle class, but that the mega deals of previous years are gone.
In a statement issued this year, Airbus said it won 421 orders from 17 airlines and lessors in Asia in 2015, representing 39 percent of the company’s net order intake for the year.
Boeing this week forecast that the world will need 38,050 planes in the next 20 years, with 38 percent of the deliveries to Asia, 21 percent to North America and 19 percent to Europe.
In other Singapore deals, a US leasing firm ordered 20 aircraft from Japan’s Mitsubishi Aircraft Corp in a transaction potentially worth more than $900 million.
PAL also said it separately signed a $600-million order with Rolls-Royce for Trent XWB engines to power its six A350s.