Boeing Crushes Airbus At Farnborough, But This Mystery Deepens
Boeing (BA) topped Airbus (EADSY) in orders and commitments at the Farnborough Airshow, but many of both aerospace giants’ orders came from mysterious unidentified customers.
Boeing wrapped up the show with $ 98.4 billion in orders and commitments for 673 commercial airplanes and $ 2.1 billion in commercial and defense services orders and agreements.
Airbus ended the premier airshow event for the year with 431 orders and commitments. A rumored AirAsia deal for 100 narrowbody jets would’ve helped close the gap but never materialized.
“Total orders were a little higher, but in the ballpark based on what we were looking at,” Jeff Windau, senior equity analyst at Edward Jones, said.
Windau said that cargo and freighters were a bright spot at the show with Boeing racking up orders for its 777 and 747 freighter variants after orders lagged in 2017.
Boeing shares fell 0.8% to 357.38 on the stock market today. Airbus’ U.S. listed shares were down 0.2% at 31.07.
Farnborough Mystery Orders
Air Lease (AL), General Electric‘s (GE) Capital Aviation Services and United Airlines (UAL) were among key customers that announced deals at the show. But many major deals came from unidentified customers, at a higher rate than usual for airshows.
Boeing announced an agreement Thursday with an unidentified customer for 100 737 Max airplanes. The list value was $ 11.7 billion. The aerospace giant also announced agreements for 15 787-9 Dreamliners valued at $ 4.2 billion with two undisclosed airlines. Airlines typically get discounts for large orders.
Airbus announced a deal for 10 A320neos, valued at $ 1.1 billion, to an unidentified customer. In the first three days of the airshow, Airbus hid the identity of customers in $ 24.4 billion orders and commitments.
Airbus’ other big, unidentified orders from earlier in the show included 100 A320neos worth $ 11.5 billion, a preliminary deal with a leasing firm for 80 A320neos valued at $ 8.8 billion, and a commitment for six A330neos worth $ 1.6 billion.
Some of the undisclosed customers are Chinese carriers, sources told Bloomberg, as President Trump’s trade war with China prompts companies to keep a lower profile.
“The world today is governed by the tweets we receive every morning from one side of the Atlantic,” Eric Schulz, Airbus’ top salesman, said at an investor presentation on Wednesday, according to Bloomberg. “So, you know that that is putting a lot of pressure within the airlines; it’s putting a lot of pressure within the governments.”
But Airbus did announce that China’s Sichuan Airlines is buying 10 A350-900s in an order valued at $ 3.2 billion.
China is a major customer for the aerospace giants as more citizens enter the middle class and travel. Boeing sees estimated Chinese sales of $ 1.1 trillion over the next two decades, making China the first trillion-dollar aviation market.
Airbus and Boeing still announced the identity of several customers at Farnborough Thursday:
- VietJet announced an outline deal for 50 A321neos, valued at $ 6.5 billion.
- Malaysian low-cost carrier AirAsia expanded an existing A330neo order by 34 for an additional $ 10 billion. But an expected 100 narrowbody jet order hasn’t yet materialized.
- Hawaiian Airlines (HA) finalized an order for 10 787-9 Dreamliners valued at $ 2.82 billion at list prices. The deal also included the purchase rights for 10 additional Dreamliners.
- Boeing announced an agreement with Dubai’s Novus Aviation Capital for up to four 777-300 extended range planes. The commitment is valued at $ 1.44 billion at list prices.
- British Airways announced a commitment for three 777-300 extended range jets. The carrier will take the planes on a lease from a leasing company.
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