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| Friday, 22 June, 2001, 17:01 GMT 18:01 UK Airbus dominates Paris Air Show ![]() Police guard the Paris Air Show as crowds mingle with salesmen Airbus has won the battle for orders at the end of the Paris Air Show, badly beating its rival Boeing. Airbus, which includes the main aircraft manufacturers from the UK, Germany, and France, has announced orders for 155 aircraft at the show, including 111 from the US-based ILFC, a subsidiary of insurance giant AIG.
Boeing downplayed the contrast, saying that what mattered was aircraft deliveries - not orders. But shareholders and analysts disagreed, pushing Boeing's stock down 11% for the week on the New York Stock Exchange. "The Air Show has reinforced the fact that Airbus continues to do well. The attractions of the Airbus product range are evident," said Tim Bennett of Morgan Stanley Dean Witter. However, Boeing is still planning to produce more planes than Airbus - around 530 this year, compared to 450 for Airbus. Total orders for all manufacturers announced at the Air Show dropped by more than 50% compared to last year, reflecting the worldwide recession. Boeing pessimism The head of Boeing's commercial aircraft division, Alan Mulally, forecast that orders for the commercial jetliner industry as a whole this year would be 800 to 900 planes, of which Boeing would have about 400, compared to more than 1,200 last year.
"If we can just have the world (economy) come back slowly, we will be in great shape on deliveries." Boeing also revealed a scale model of its controversial Sonic Cruiser, designed to cut hours off the travelling time of long distance air passengers - but there are no orders yet for the new plane. However, Boeing does still have a lock on sales to four of America's top carriers - American, Continental, Delta and Southwest. And Boeing derives 40% of its profits from defence and space businesses, which are less vulnerable to cyclical downturns. But most analysts believe Airbus will catch up with its rival in the next few years. "I wouldn't try and judge a market based on one week's sales... But in the long-run I do see Boeing and Airbus splitting the market 50-50," said one analyst. Military orders mount up Airbus was also poised to break into the military market for the first time, with a commitment from the UK to buy the new A400M military transporter.
A commercial contract is due to follow later in the year. Britain and some other European countries currently rely on the American-built Hercules for large-scale operations. The UK recently leased four of Boeing's giant C17s. But Boeing's dominance of the military market has been reinforced by its partnership with Lockheed in producing the Joint Strike Fighter, an aircraft to be used both from airfields on land and aircraft carriers, that will be used by the United States and 21 other nations. The UK's BAE Systems, who is a member of the Airbus group, is also hoping for military subcontracts to build the JSF. And there are hopes that the US missile defence initiative will also produce more work for the European defence industry. Regional battle Meanwhile the battle for regional and business jet orders also heated up. While the two big planemakers, Airbus and Boeing, registered less than half the orders this week than they did a year ago at the Farnborough air show in England, makers of business jets, seen traditionally as an unessential luxury, are having trouble keeping up with demand. The market for business jets has taken off because of fractional ownership, which allows smaller companies to buy a proportion of time on a business jet leased from a supplier. The biggest order, for 100 Falcons from Dassault, was for United Airlines' United BizJet Holdings fractional subsidiary, which plans to build up a fleet of 200 planes within five years. "The United plan shows the company is not offering their customers what they want with their traditional jets," said Steven Udvar-Hazy, head of airline leasing giant ILFC. But rivals Bombardier and Embraer also had a good Air Show, with Brazil's Embraer announcing an order for 100 ERJ 190 regional jets from TAM Brazilian Airlines, while its Canadian rival Bombardier sold 50 regional jets to Germany. |
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