Boeing, Airbus Continue Slugging It Out at Paris Air Show

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No one expected The Boeing Co. (NYSE: BA) to pull out a single order for 200 single-aisle 737 MAX jets during this week’s Paris Air Show, but that’s just what the company managed to do Tuesday afternoon. The letter of intent Boeing signed with International Air Group (IAG) for 200 MAX jets gave the troubled aircraft maker a much-needed spike in the court of buyer opinion.

Boeing undoubtedly made IAG an offer it couldn’t refuse. On an order of this size, the typical discount to the list price is likely to be more than 40% and could go as high as 60%, in this case, simply because the MAX family jets have remained grounded worldwide and could stay there until much later this year. Whatever discount IAG is getting is absolutely worth it to Boeing.

By Tuesday evening, Boeing had still not written a single firm order, according to Airfinance Journal’s tally, although it has received commitments for 220 planes, substantially more than the 49 firm orders and 68 commitments received by arch-rival Airbus. In terms of dollar value, Boeing’s commitments are valued at $31.8 billion (list prices) compared with a dollar value of $31.6 billion for Airbus’s orders and commitments.

Wednesday’s action in Paris began for Boeing with the announcement of a letter of intent from Taiwan-based China Airlines to purchase up to six of the freighter versions of the 777. If the airline takes all six planes, the deal is worth more than $2.1 billion at list prices.

Ireland-based aviation firm ASL Aviation Holdings DAC signed a memorandum of understanding for 20 737-800 Boeing Freighter Conversions, 10 of which are firm orders and 10 purchase options. A single 737-800 carries a list price of $106.1 million and, including the conversion cost, a 737-800 BCF has a list price of around $110 million.

Turkmenistan Airlines has signed a commitment to purchase one 777-200LR to add to the three already in its fleet. The plane has a list price of $346.9 million.

Finally, Qatar Airways signed a commitment to purchase five 777 Freighters valued at $1.8 billion.

Airbus announced several deals of its own. Ireland-based lessor Accipiter Holdings signed a purchase agreement for 20 A320 single-aisle passenger jets. The order had previously been attributed to an undisclosed buyer on the company’s order book. Each A320 has a list price of $101 million.

Taiwan’s China Airlines signed a memorandum of agreement for 11 A321neo passenger jets and will acquire another 14 on leases. Each A321neo has a list price of $129.5 million.

Arizona-based Indigo Partners signed a memorandum of understanding to purchase 50 A321XLRs, the plane Airbus introduced at this year’s show. Of the 50 planes, 38 are new orders and 12 are conversions to the new model from previous orders for A320neo jets. Indigo plans to allocate 20 of the planes to Hungary-based Wizz Air, 18 to Frontier Airlines, and 12 to Chilean airline JetSMART. Airbus has not indicated the difference between the base A321neo’s list price of $129.5 million and the list price for an A321XLR. The new plane flies longer routes than either the A321neo or the A321LR. In a two-class seating configuration, all three planes carry 180 to 220 passengers.

Australia-based Qantas Airways has agreed to purchase 36 new A321XLRs, of which 26 are conversions of existing orders for A320neo jets and 10 are new firm orders. Note that Airbus does not plan to deliver the first A321XLRs until 2023.

On Monday, Boeing issued its annual outlook on the market for commercial jets over the next 20 years. The company expects demand for new airplanes to exceed 40,000 aircraft.

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