U.S. planemaker Boeinglanded the first blow at this week’s Farnborough Airshow, winning an order worth up to $7.2 billion from U.S. Air Lease Corp, as amarket share battle with its European rival Airbus plays out.
Flamboyant leasing entrepreneur and ALC founder Steven Udvar-Hazy marked the deal by ringing the opening bell for the New York Stock Exchange by satellite – underscoring the joy ride recently felt by many aerospace firms in the face of recession.
Boeing said on Monday the order was for 75 of its fuel-efficient 737 Max jets – a model that is key to its attempted fightback against Airbus’s rival A320neo short-haul aircraft.
Although economies are stuttering, aircraft demand remains relatively strong as airlines modernize fleets to survive high fuel costs and the balance of growth shifts towards Asia, prompting Boeing to raise forecasts last week.
Nonetheless, Airbus and Boeing are locked in their fiercest battle for up to a decade, slashing prices to win orders for their latest narrowbody jets and storing up potential trouble for future profit margins.
And although jetmakers predict hundreds of orders this week, day one had an air of anti-climax amid suggestions that an unexpectedly strong order cycle may soon be peaking.
"There is a ‘fin de siecle’ quality about this show unless there truly is a raft of orders, although you do always see some surprises," said analyst Nick Cunningham of Agency Partners.
Boeing chief executive Jim McNerney has predicted the U.S. planemaker, helped by the 737 Max, will outsell Airbus for "a number of years" having trailed its European rival since 2006. Airbus also expects Boeing to make up ground this year.
Hazy’s endorsement was a boost to the newly-appointed head of Boeing’s commercial division, Ray Conner, a former sales chief thrust into the spotlight at his first high-profile event in the job after Jim Albaugh’s unexpected decision to retire.
"We have a terrific machine now," said Conner, a laid-back former mechanic who worked his way up from the production floor to become chief executive of Boeing Commercial Airplanes.