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Did Airbus Steal The Show At Farnborough?

August 06, 2014 | About:

The European airplane maker Airbus (NASDAQ: EADSY) has been struggling hard to match its order book with chief rival Boeing (NYSE: BA). Boeing has retained its supremacy over Airbus as the market leader in the wide-bodied aircraft category. The trailing European player had its eyes set on the Paris Airshow which is visited by several airlines and leasing companies looking for better and efficient planes.

Let’s find out if Airbus saw any dramatic change in its order book after the Farnborough Airshow and where its order book stands as on date.

The A330neo offered the winning edge
On the first day of the show Airbus commenced the A330neo program which had rumors on its launch until the last day before it got finally announced by Airbus’ management. Customers literally flocked to have their first glance of the A330neo model which is expected to compete with Boeing Dreamliner 787.

A330-900neo Model Displayed At Farnborough Airshow. Source: Yahoo.com

The A330neo model would have 15% better fuel efficient features to its predecessor. It would easily compete with Dreamliner in terms of pricing as it would possibly come with a listed price of around $275 million for an A330-900neo whereas Boeing 787-9 holds a retail price of $249.5 million. Though at first glance Airbus A330neo might look costlier, customers have still booked their orders based on the aircraft filling more passengers as an A330-900neo can seat nearly 310 passengers while a Boeing 787-9 can seat only 280 passengers.

On the first day of the show, low cost carrier Air Asia X became the largest customer for Airbus A330-900neo, buying 50 A330-900neos worth about $13.8 billion. Within a span of four days of the show, the A330neo bagged around 121 orders, though not firm but quite commendable for the European player that has faced several hiccups in the wide bodied aircraft segment. It is also important to stay reminded that though this airplane might become Airbus’ flagship brand in the wide bodied segment in the long run; its deliveries are expected only towards the end of 2017. But nevertheless, almost every airline wants to go for an A330neo order before it actually hits the market.

The A320neo order rate remains impressive
The A320neo was also not far behind in the order race and bagged 369 orders and commitments during the airshow. Demand for the new engine option of A320 series was particularly strong at the airshow.

Airbus’ biggest order for A320neo came from SMBC Aviation Capital, an aircraft leasing company that focuses on emerging markets. This company has ordered 110 A320 new engine option, and five A320 with current engine option. Hong Kong Aviation Capital has also ordered on similar lines for 40 A320neo models.

Final order count versus Boeing
Within the week of the Airshow the European planemaker was able to garner 496 orders worth $75 billion. On the contrary, its sole rival was able to bag only 201 orders for its existing and new aircraft worth $40.2 billion.

Airbus’ CEO, John Leahy acknowledged the win saying – “The orders and commitments we've received at this record-breaking Farnborough for both the A330neo and A320neo families are together an unequivocally resounding endorsement for these most cost-efficient aircraft.”

Interestingly this airshow has brought a huge difference in the current order count of Airbus which stands at 705 net orders until July 31 and is now comparable to the market leader Boeing, which holds 783 confirmed orders. The airshow has thus reduced the gap in the order book of the two major airplane manufacturers and Airbus surely has enough reason to rejoice.

Final outlook
Airbus has given a stellar performance in the Farnborough Airshow and no wonder the management is confident of fetching more orders in the rest of the year. The war with its rival in the wide bodied aircraft segment is expected to continue, but Airbus knows the trick of how to play its cards against Boeing in the long run.

About the author:

We are a group of analysts exploring and analyzing different domains of business and writing reviews based on information available in public domain web portals. We do not hold any stock or investment position in any of the companies that we write for.

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