Aerospace & Defense

Boeing, Airbus Orders on Day 1 of Farnborough Airshow

As expected, the first day of the Farnborough Airshow was a busy one for the two major commercial jet makers. Boeing Co. (NYSE: BA) announced orders for some 59 new passenger jets, while European rival Airbus said it took orders for 100 new planes. Not all these orders are new or firm.

Before turning to the scoreboard, one item of special interest is an order from United Airlines for 25 Embraer S.A. (NYSE: ERJ) E-175s and four Boeing 787 Dreamliners. Just a week ago, Boeing and Embraer announced a partnership that eventually will result in Boeing controlling the commercial jet business of Embraer. The operative word there is “eventually.”

The two companies are prohibited by law from coordinating orders until their joint venture deal is completed, and that is not expected to happen until late in 2019. The order for 25 E-175 regional jets is a solid win for the joint-venture-to-be.

According to United’s announcement, the new Embraer jets “will replace 25 CRJ-700 aircraft.” The CRJs are manufactured by Bombardier, which just closed its deal with Airbus under which the larger company has taken over the Canadian firm’s CSeries program and recently renamed the two aircraft the A220-100 and the A220-300.

Now the scorecard. Boeing has finalized an order for 15 777 freighters from package delivery service DHL and another order for five 777 freighters from Qatar Airways. Leasing firm Jackson Square Aviation has ordered 30 737 MAX aircraft in a deal valued at about $3.5 billion at list prices.

At current a current list price of $339.2 million per copy, the DHL deal is valued at around $5.1 billion and includes options on seven additional planes. This order already had been listed on Boeing’s order book as coming from an unidentified buyer. The Qatar Airways deal is valued at $1.7 billion and was announced as a commitment in April.

As noted, United ordered four 787-9 Dreamliners valued at around $1.1 billion, and Romanian carrier TAROM has placed an order valued at $586 million for five 737 MAX 8 passenger jets. This order had been on Boeing’s order book as an unidentified buyer.

Airbus announced several deals as well. The first confirmed an order announced earlier this year for 10 A350 XWBs from China’s Sichuan Airlines worth about $3.2 billion at current list prices (A350-900).

India’s Vistara has signed a letter of intent to purchase 13 A320neo aircraft and committed to leasing an additional 37 from various lessors. Airbus is counting this as a 50 aircraft for Vistara. The list price for an A320neo is $110.6 million, which means the total order is valued at around $5.5 billion.

Taiwanese carrier Starlux has signed a memorandum of understanding to purchase 12 A350-1000s and five A350-900s. The total list price value of the order is about $6 billion.

Kuwaiti carrier Golden Falcon Aviation confirmed an order for 23 A320neo aircraft. The order follows a commitment made at last year’s Dubai show. The order is worth around $4 billion.

All in all, the order announcements mostly confirm previous deals or signal new deals coming once the details—that is, pricing—are hammered out.

Boeing stock was up fractionally in Monday’s premarket after closing Friday at $350.79, up about 1.4%, in a 52-week range of $207.53 to $374.48.

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