Aerospace Angling
June 18, 2007
Additional announcements from both Airbus and Boeing are expected during the week-long industry event as the world's biggest manufacturers of civilian aircraft go head-to-head in a commercial and public relations contest to book new orders.
In the first hours of the Paris event, the European group orchestrated the announcement of new orders for its troubled superjumbo A380 from Qatar Airways and Dubai-based Emirates.
At an Airbus press conference, Qatar Airways said it would buy three additional A380 superjumbos and confirmed a previous order for 80 mid-sized A350s. The planes would be worth slightly more than $18 billion dollars (13.4 billion euros) at catalog prices.
Soon afterwards, Emirates chairman and chief executive Sheikh Ahmed bin Saeed al-Maktoum said his company planned to buy eight more A380s worth $2.5 billion at catalog prices. Emirates was already the single biggest client for the A380 with an order for 43 of the aircraft.
American carrier US Airways also signed a letter of intent on Monday to buy 92 Airbus aircraft in the A350, A330 and A320 families, the two companies announced Monday. The order was worth move than $8 billion, according to Airbus commercial director John Leahy.
Airbus has fallen far behind Boeing for new orders in 2007 after being overtaken by the US manufacturer in 2006.
But chief executive Louis Gallois hinted that more new business was to come. Including the order from Qatar Airways, only 93 orders have been announced by Airbus since the launch of the 10 billion euro A350 program at the end of 2006.
Weak dollar hurting Airbus
The European manufacturer has had major production and design problems in the last few years and tallied up losses last year after a profit of 2.3 billion euros in 2006. A weak dollar has also made buying from Airbus expensive as international deals are usually made in dollars, not euros.
"We have to make Airbus competitive at an exchange rate of 1.45 dollars per euro," Gallois told reporters before the show. The current exchange rate is $1.34 to the euro. "If the euro continues to rise, it will force us to make new decisions about where production is located."
Earlier this year Airbus announced a restructuring plan that executives said could save 5 billion euros by 2010 and 2.1 billion euros per year thereafter and may lead to as many as 10,000 job cuts. Airbus employs 56,000 people, including 22,000 in France and 21,000 in Germany.
Deliveries of the A380, which is to enter service later this year, are running about two years behind schedule and Airbus is keen to shore up confidence in the project. Airbus was also forced to re-design its A350, which re-emerged with an enlarged body, after a poor response from clients to the original shape.
New orders at Boeing, too
Boeing meanwhile has sprinted ahead in large part because of the popularity of its future mid-sized 787 model, which will enter service in mid-2008, five years ahead of the A350.
At the end of May, Airbus had reported 201 new orders for planes this year, while Boeing had 429 at the beginning of June.
The US-based group received a boost from aircraft leasing group GECAS on Monday, which said it had placed a firm order for six Boeing 777 cargo aircraft.
About 400,000 people are expected to visit the event, which features air displays as well as exhibitions, at the Le Bourget airfield on the outskirts of Paris.
Organizers decided to pay tribute to the helicopter this year, which is celebrating its 100th anniversary.