Wide-body jets, huge deals dominate Air Show in Paris

PARIS - Reuters

Models of Airbus planes are displayed at the Airbus stand, on the first day of the Paris Air Show yesterday at Le Bourget airport, north of Paris. AP photo

Big finance waded into a rain-soaked Paris Airshow with more than $10 billion in orders for jumbo passenger jets as planemakers duelled over strategy for large aircraft yesterday.

The world’s biggest aircraft lessor, a unit of General Electric, became the second buyer to endorse a larger version of Boeing’s 787 Dreamliner, weeks after the lightweight jet went back into service after a three-month grounding.

Confirming a Reuters report, the GECAS subsidiary said it would sign up for 10 of the stretched 787-10 passenger planes, joining a $30 billion order haul that industry sources say Boeing is assembling to formally launch the jet today.

And an influential German leasing company, Doric Asset Finance, little known outside the specialist world of aviation financing, splashed out on 20 Airbus A380 superjumbos worth $8 billion at list prices to anticipate rising demand.

Total orders on day one of the world’s largest aerospace event swelled to more than $30 billion in three hours as heavy rain lashed the Le Bourget pavilions.

But, despite the early flurry, the number of orders this year was expected to be down on the last Paris show in 2011, GECAS chief executive Norman Liu told reporters.

“It is shifting to more of a wide-body story,” he said, referring to long-haul jets seating anywhere from 200 people on small wide-bodies to 525 on the double-decker A380.

“We see how airlines that do not yet have the A380 are interested in it and approach us and ask questions, which shows us that there is pent-up demand for this aircraft,” Mark Lapidus, chief executive of Doric Lease Corp, said.

The move is a boost for Airbus which has struggled to sell the model in the past year haunted by wing cracks, and had recorded no sales so far in 2013.

Boeing says airlines do not want to invest heavily in the largest jets above 400 seats, even though it originally defined the category with its 747, and would prefer to buy smaller planes built with new weight-saving materials.

Airbus has stood by the industry mammoth, saying urbanization and airport congestion will drive traffic towards planes that can keep pace with demand for travel between hubs.

Next-generation jets

Most attention at the air show, however, focused on a new generation of mid-sized long-range jets, seen as crucial to the future of both companies and their suppliers.

Boeing said last week it sees a $1 trillion market over the next 20 years for mid-sized, twin-engined passenger jets, a category that includes its carbon-composite 787 Dreamliner.

Days after it surprised the industry by making the first flight of its rival A350 before the show, Airbus will attempt a curtain call on Friday with a fly-by for French President Francois Hollande, on only the plane’s third test.

Airbus and its U.S. rival have placed bets worth tens of billions of dollars on the success of this market.

Behind them Canada’s Bombardier is betting the same technology will be suitable for smaller planes as it seeks to boost orders for its new CSeries, due to fly this month.

Singapore Airlines, British Airways and Air Lease Corp are expected to place orders for the 787-10. They will be joined by United Airlines, industry sources said. None of the companies could immediately be reached for comment.

Leasing companies and airlines, looking beyond the financial crisis, meanwhile, placed orders for more than $20 billion small narrow-body planes like the Boeing 737 MAX and the A320neo.