August 7, 2022

Airbus Beats Forecast for Revamped A320 Orders

The European plane maker announced commitments for more than 100 more A320neo jets at the Paris Air Show here, bringing the total backlog for the plane, which has been on offer since December, to nearly 600 aircraft — well beyond the 500-order benchmark that Airbus had initially predicted it would achieve by the end of the show.

Neo stands for New Engine Option. The momentum building for the 150 to 180 seat plane, which is being equipped with new engines that are 15 percent more fuel efficient than current models, is likely to put pressure on Boeing to make a decision on whether to follow suit with an enhanced version of its competing 737 jet, or to develop an entirely new narrow-bodied jet for delivery at the beginning of the next decade.

“It prompts Boeing to do something,” Henri Courpron, chief executive of International Finance Lease Corp., told Reuters. “It cannot do nothing.”

Boeing executives have said they expect to decide on the company’s future single-aisle strategy by the end of this year.

Airbus chalked up $11 billion in new jet orders and commitments on Tuesday, bringing its total haul for the first two days of the show to more than $26 billion.

Boeing received new orders worth $4.7 billion, bringing its two-day total to nearly $16 billion. The U.S. plane maker also disclosed the buyers of planes worth several billion dollars more, which it had previously attributed to unidentified customers.

CIT Aerospace, another leasing company, committed Tuesday to purchase 50 A320neos for delivery from 2016 to 2019. That commitment is valued at $4.6 billion at list prices.

JetBlue Airways, the U.S. low-cost carrier, announced its first purchase of A320neos, committing to order 40 of the revamped single-aisle planes for delivery from 2017 to 2021. The carrier, which is the world’s largest A320 operator with a fleet of 119 of the planes, also said it would convert 30 existing orders for classic A320s into the stretched A321 version, which will be delivered starting in 2013.

Elsewhere, Garuda Indonesia said it would buy 10 A320neo jets in addition to 15 classic A320s for its domestic low-cost subsidiary, Citylink, in a deal worth a combined $2.2 billion. Garuda, the Indonesian flag carrier, said the new aircraft would eventually replace Boeing 737s in Citylink’s fleet, though Garuda itself would continue to fly them.

TransAsia Airways of Taiwan ordered six A321neos, valued at $635 million at list prices.

“Passenger growth is a function of economic growth, and Asia-Pacific is where the growth is right now,” said Emirsyah Satar, the Garuda chief executive. He said air passenger traffic at Garuda had been growing at a “double-digit” pace for the past several years.

Air passenger traffic within the Asia-Pacific region is expected to expand at an average annual pace of around 7 percent over the next two decades, according to a long-term forecast published last week by Boeing. That compares with forecasts for annual traffic increases of just 2.3 percent in North America and 4 percent in Europe.

Asia-Pacific carriers are expected to receive more than one-third of all new aircraft deliveries between now and 2030, representing $1.5 trillion in sales.

Boeing announced new orders on Tuesday for a further 25 of its single-aisle 737-800 jets, valued at around $2 billion at list prices. Norwegian Air Shuttle, a low-cost carrier based in Oslo, ordered 15 of the planes while Malaysia Airlines said it had exercised an option to purchase 10, bringing its total 737-800 orders to 45. The Malaysian order had been previously attributed to an unidentified customer on Boeing’s order book.

Norwegian Air Shuttle also finalized a contract for three 787 widebody jets, worth $650 million.

Boeing also announced a number of widebody orders from GE Capital Aviation Services, the aircraft-leasing arm of General Electric. The lessor, known as GECAS, said it would buy eight long-range 777-300ER jets and two freighter versions of the stretched 747-8, which is making its debut at the Paris show. The value of that order was not disclosed, but would be worth $2.9 billion at list prices.

Boeing also disclosed that the Russian flag carrier Aeroflot was the buyer earlier this year of eight 777-300ER jets, valued at $2.3 billion, which the plane maker had previously attributed to an unidentified customer.

Elsewhere, Bombardier of Canada announced its second order in as many days for its forthcoming C-Series regional jet.

The firm order for 10 planes, worth more than $600 million, came from Korean Air, which also signed for 10 options and 10 purchase rights on the 130-seat version of the plane, the C300. Bombardier on Monday announced a 10-plane order from an unidentified “major network carrier.”

Bombardier now has 123 firm orders from seven customers for the plane, which is expected to enter service in 2013.

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