Bloomberg
Boeing Co. dominated the deal flow at the Paris Air Show, overwhelming rival Airbus SE on the back of Asian demand for the new Max 10, the biggest version of its 737 workhorse.
The US planemaker secured orders and expressions of interest (EOI) for more than 500 jets worth as much as $66 billion, compared with Airbus’s tally of 227 airliners for about $24 billion. Airbus could still fire back, as the Toulouse, France-based manufacturer’s veteran sales chief John Leahy will be loath to be outdone in what’s set to be his last appearance at the aviation industry’s biggest gathering.
Boeing’s 737 Max 10, rolled out to combat Airbus’s hot-selling A321neo, has secured $30 billion in commitments alone at the show. While many deals were tentative or involve conversions of existing contracts, the overall haul looks set to surpass the total $50 billion signed at the 2016 show in Farnborough, England, which was the lowest figure since 2010. Asian purchasers were particularly active as they gird for an accelerating travel boom. That’s a contrast to the relatively restrained buying from crowded markets in the US and Europe.
“We have never seen a demographic shift like that ever in the world, in terms of the scale but also the purchasing power,†Domhnal Slattery, chief executive officer of Avolon, said after the world’s third-largest lessor ordered $8.4 billion of Boeing planes. “We’re backing that global trend.â€
‘Valuable Real Estate’
Avolon decided to lock in deliveries of as many as 125 of Boeing’s upgraded narrowbody jets because production slots are “very valuable real estate.†The Max family of planes is oversold through 2020, and capacity is finite for the model favored by budget carriers, Slattery said in an interview. He projects the middle class in Asia to eventually swell by more than 1 billion people in the coming years.
Boeing said demand for single-aisle planes as well as wide-bodies remains buoyant, despite concerns about economic and political turbulence in the Middle East and low fuel prices serving as disincentive to invest in more efficient aircraft.
“We are continuing to see strong energy in the marketplace,†said Boeing Chief Executive Officer Dennis Muilenburg.
The Max 10, the first new model from Chicago-based Boeing since the 777X series was unveiled at the Dubai Air Show in 2013, will be 5 1/2 feet (1.68 meters) longer than the $119.2 million Max 9, currently the biggest member of the re-engined 737 family, which was launched in 2011.