Airbus, Boeing announce $3b airplane deals

Airbus, Boeing announce $3b airplane deals
By Anne Majumdar


Airbus and Boeing have announced modest aircraft orders at the Singapore Air Show, which indicates a lull in demand for the big manufacturers after the 2014 show hauled in more than $US30 billion of deals.

Airbus announced an order for six A350-900s, valued at $US1.8 billion ($A2.54 billion) at list prices from Philippine Airlines.

Boeing announced a deal for 12 of its 737 jets with a privately owned Chinese carrier Okay Airways, valued at $US1.3 billion.

Boeing and Airbus executives at the show have voiced confidence that air travel in Asia will continue to grow strongly. They said no Asian airlines had deferred orders already placed.

But some industry experts say the slump in oil prices during the past several months means airlines will keep their older, less-fuel efficient aircraft for longer and buy fewer new jets.

“One of the reasons why the order books are full is because the fuel price was high, so there was an incentive to buy the more fuel-efficient planes and get rid of the old ones,” said David Stewart, an aviation and aerospace adviser at ICF International.

“But now the fuel price is low, so some airlines will keep their older planes longer, and therefore not need the new. It’s a quiet time for all of us.”

Airlines were also deterred by the filled order books of Airbus and Boeing, which could mean a long wait for the delivery of aeroplanes, Stewart said.

Okay Airways Wang Shusheng said his company’s order for 737s was not part of a deal Boeing signed with China in 2015 to supply 300 aircraft worth $US38 billion.

He said the order would “further modernise our fleet and ensure we operate the most efficient fleet well into the future”.

Both jet manufacturers made their announcements on the second day of the Singapore Airshow, which ends on February 21. More than 1000 companies are taking part.

The previous show in 2014 generated deals worth $US32 billion, and organisers will release this year’s total after the event’s trade period ends on Friday.

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