Mideast puts Airbus far ahead of Boeing
DUBAI, United Arab Emirates - Airbus forecast record orders this year, putting it on course to beat Boeing, after securing more than $50 billion of commitments at the Dubai Airshow.
Orders should surpass the 1,111 amassed in 2005, Chief Executive Tom Enders said Monday at the show. Deliveries will exceed 450, he said, making the Toulouse, France, company the No. 1 jetliner maker for a fifth straight year.
Boeing lagged more than 60 orders behind Airbus at the end of October and said Monday that deliveries are unlikely to exceed 445 planes.
The contracts won in Dubai are a boost for Airbus as it struggles to end losses after a $6.8 billion charge from production of the A380 superjumbo and delays to its new A350 long-haul plane.
But the cost of the holdups and the use of discounts to squeeze out Boeing may mean that even with higher orders the European company will struggle to beat its U.S. rival’s financial performance.
“I’d thought Boeing might edge Airbus out, but not for the first time they’ve come through with some extra orders toward the end of the year,” said Doug McVitie, managing director of Arran Aerospace, a consulting company in Dinan, France. “The concern would be how much they are effectively buying market share through heavy discounting.”
Purchases from Mideast airlines are running at record levels as oil-rich states use their wealth to develop into tourist and travel hubs.
Airbus on Sunday won a $31 billion contract from Emirates, the biggest Arab carrier, followed Monday by a $13.5 billion deal from the leasing unit of Dubai Aerospace Enterprise (DAE).
Boeing won a $13.7 billion order from DAE and one for $6.1 billion from Qatar Airways. The company said it may benefit next year as North American airlines replace older planes.
Airbus, which is accelerating production of its A320-series narrow-body aircraft, had previously forecast 440 to 450 deliveries for 2007. Boeing spokesman Brian Walker reiterated Monday that the Chicago-based company expects to hand over 440 to 445 planes.
The European company will have a backlog of more than 3,000 orders by the end of this week, equal to five or six years of work, Enders said at a news conference.
It had secured 1,021 contracts at the end of October compared with 956 at Boeing.
Dubai-based Emirates placed a firm order for 70 A350s, with 50 options, plus 11 double-deck A380s. The decision is a vote of confidence for the A350, which costs more than the 787 and isn’t available until 2013.
Airbus now expects to seal contracts for 300 A350s before the end of the year.
The 787 has production problems of its own and is due at the end of next year, six months later than planned. Boeing had 710 orders for the plane as of mid-October, the company’s most successful sales effort for a new model.
DAE’s Airbus order is for 30 A350s and 70 A320-family planes for delivery from 2013 to 2022. The deal is provisional and subject to confirmation.
Also Monday, Airbus secured a contract for 34 A320 craft valued at $2.48 billion from Air Arabia, a United Arab Emirates discount carrier. Saudi Arabian Airlines ordered a further 22 of the type, worth about $1.6 billion at list price.
Airbus on Sunday sold 20 A320s valued at $2 billion to National Air Services, a Saudi budget carrier.
Boeing’s Dubai order book features 30 787s and five 777 wide-body freighters for Qatar Airways, 70 single-aisle Next Generation 737s, 15 787s, 10 777s and five 747-8 freighters for DAE’s leasing unit, and 12 777s for Emirates valued at $3.2 billion.
Airbus CEO Enders said that even with record deliveries and orders, the plane maker faces difficulties in coping with a weaker dollar. It has most of its costs in euros and gets paid in the U.S. currency, the international denomination for aircraft purchases.
“On the one hand we are increasing production, increasing orders, backlog, and demand is very high,” Enders said. “On the other, we have to work on our efficiency.”
“Flying palace” A380
fit for Saudi prince
DUBAI, United Arab Emirates - In the annals of excess, it could be a new high: A more than $300 million, supersized luxury airplane, bought and outfitted solely for the private comfort of a Saudi Arabian billionaire.
Once done, the Airbus A380, the world’s biggest passenger plane, will be a “flying palace” for Prince Alwaleed bin Talal, the manufacturer announced Monday.
Airbus would not give a specific price tag for the VIP double-decker jet, saying only that it would cost more than the aircraft’s list price of $320 million.
That doesn’t include the money the prince will spend to custom fit the nearly 6,000-square foot plane. The options include private bedrooms, a movie theater or even a gym with a Jacuzzi.
He’ll also need a flight crew of about 15.
“Prince Alwaleed is the first, and so far the only customer of this aircraft,” said Airbus spokesman David Velupillai.
Bin Talal is Citigroup’s biggest individual shareholder and the world’s 13th richest person with assets around $20 billion.
As a member of the Saudi royal family, he benefits from the country’s vast oil wealth.
But much of bin Talal’s huge fortune comes from his investment firm, the $25 billion Kingdom Holding, which has stakes in Rupert Murdoch’s News Corp., Fairmont Raffles Hotels International, Time Warner, Apple, PepsiCo and Walt Disney Co.
The prince, who is in his early 50s, appears to have a taste for supersized jumbo jets. He already is the only private owner of a Boeing 747-400, Airbus said.