Boeing shut out of orders race in Paris

June 16, 2009 6:43:43 AM PDT
Airbus edged into the lead Tuesday in a muted race with Boeing for plane orders at the Paris Air Show, which has been hobbled this year by recession, tight credit markets and plane crash concerns. Planemakers at the world's biggest air show are trying to coax airlines and governments to open their pocketbooks and buy more aircraft despite plunging passenger loads and revenues. Airbus CEO Tom Enders said Tuesday's sunny skies - after pelting rain on Monday's opening day - boded well for business and promised more orders later in the day.

Boeing Co. executives said the industry's prospects were robust, yet the Chicago-based aviation giant has reported no new orders so far. Airbus announced just one Monday, from Qatar Airways for 24 jets from the A320 family worth $1.9 billion.

That was well below the $25 billion raked in the first day of the last big show, at Farnborough, England last year.

On Tuesday, Airbus also announced a firm order from a private Asian customer for an A320 Prestige, the first Asian buyer for the high-end business jet. The buyer and the cost of the deal were not released.

Both rivals sought to minimize expectations this year amid worries about credit markets, the global economy and the unexplained crash of Air France Flight 447.

"This is not the time to expect huge orders, but there are still orders coming in because the situation is different from region from region," and company to company, Airbus' Enders told a news conference. "What counts for our numbers, our financial health, is not orders but turning our backlog into delivery."

He also sought to reassure the company's thousands of workers amid cutbacks across the aviation industry.

"We are very much interested in keeping stable the most important asset we have in our company ... our skilled workforce," he said.

Boeing warned last week not to expect a flurry of orders. Its defense business is hoping to make up for lagging commercial sales - and weakening U.S. military sales - through rising international exports.

Boeing's commercial aircraft chief sought Monday to strike a positive tone.

"At this point it appears to us that the economic conditions have bottomed," said Scott Carson, president and chief executive of Boeing's commercial aircraft division. "If they have bottomed and a recovery comes next year, I think we have a shot at getting through."

Boeing recently cut its outlook for the commercial aircraft market for the first time in at least a decade, which Carson said was mainly driven by the drop in freight traffic due to the global recession.

Gulf-based carriers were among the few pulling out their checkbooks this year, but the head of the biggest - Emirates Airlines - said the industry is engaged in an "lunatic" price war to win back passengers.

"(A) major Asian carrier has introduced fares from the West coast of America to India that I'm surprised would cover the cost of catering," said Tim Clark, president of Emirates Airlines. He did not name the competitor.

Russia's Sukhoi aircraft giant is seeking to make a splash at the Paris Air Show with its SuperJet, key to Russia's effort to revive its civilian aviation industry. Deputy Prime Minister Sergei Sobyanin showed the plane off Tuesday to French government officials and boasted its technology was better than the latest Airbus planes.

Sukhoi netted promised orders from Hungary's Malev for 30 jets worth up to $1 billion. But it was a commercial sleight of hand, since Malev was bought by the Russian state-owned bank Vnesheconombank in a high-profile deal earlier this year. The SuperJet 100 is designed to fly both regional and medium-haul routes.

So far this year, Boeing - which is cutting 10,000 jobs - has taken orders for 73 planes, but with cancellations of 66, the net order intake is only 7 jets.

Airbus' order tally advanced to 56 on Monday after the Qatar Airways order. After cancellations, net orders to date total 35.

Both planemakers are cushioned by order backlogs of around 3,500 planes.

The industry gathering has been shaken by Air France Flight 447's still-unexplained May 31 crash into the Atlantic Ocean while en route from Rio de Janeiro to Paris.

Investigators have only two more weeks to find the flight data and cockpit voice recorders from the Airbus A330 jet before the signals emitted by small beacons on the black boxes start to fade. Without them, the cause of the crash that killed all 228 on board may never be fully known.

The Paris Air Show is marking its 100th anniversary. It opened to industry on Monday, and then to the public Friday to Sunday.

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Associated Press writers Slobodan Lekic and Laurent Pirot at Le Bourget contributed to this report.

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