Jun 18, 2013

    Long-haul jets the focus at Paris show

    LEADING planemakers are battling over strategy for big jets as the Paris Air Show got under way yesterday.

    After a bruising two-year fight for market share of popular smaller models, Airbus and Boeing are increasing the deployment of next-generation long-range jets, seen as crucial to the future of both companies and their suppliers.

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

    "People are focusing on long-haul aircraft this year. It is a crucial segment and a fundamental one for the profitability of both constructors," said Mr Bruno Goutard, sector economist at credit insurer Euler Hermes, which has a key role in aviation.

    Boeing said last week it sees a US$1-trillion (S$1.25-trillion) market over the next 20 years for mid-sized, twin-engined passenger jets, a category that includes its 787 Dreamliner.

    Europe's Airbus and its United States rival have placed bets worth tens of billions of dollars on the success of this market.

    However, while the big two still dominate the shows, other players are entering the market, with Canada's Bombardier hoping to win orders in the medium-haul segment with its CSeries, a plane with 110 to 130 seats.

    "The duopoly is definitely over," acknowledged Mr Randy Tinseth, marketing vice-president at Boeing.

    For Boeing, the latest addition to its fleet, the 323-seat 787-10, is partly designed to serve dense routes within Asia - a region fast emerging as the world's largest travel market.

    The company says it will have the best economics of its kind, while Airbus sees it as a repeat of a previous 767 flop.

    Boeing re-introduced the 787 Dreamliner to service in April after a three-month grounding due to battery problems. Now it is looking at a partial redesign of its 777 mini-jumbo too.

    The decision to go ahead and build a new 787 version, backed by up to 100 orders spread between five or six launch customers, is expected to be announced at Le Bourget today. Some orders may be converted from existing demand for smaller jets.

    "We have no comment, but we are having discussions with our customers about the potential for the 787-10X," a Boeing spokesman said, referring to the project's working name.

    Leasing companies are at the event in force and could continue placing orders for narrow-body planes like the Boeing 737 MAX and the A320neo, as the civil side of the industry looks beyond the financial crisis and focuses on emerging markets.

    Breathing life into recently slow sales of the world's largest airliner, Airbus could win a double-digit order for the A380 superjumbo from Doric Asset Finance, industry sources said.

    Airbus also hopes to add a slew of orders for the A350 - set for delivery at the end of next year - to confirmed contracts with Qatar Airways, British Airways and Hong Kong's Cathay Pacific.

    The military side of the world's largest aerospace event looks set to be quiet by comparison with previous years.

    US companies have scaled back, but all eyes will be on the return of Russian fighters, noted for striking manoeuvres.

    Budget cuts prevented the US government from bringing F-16 jets, which usually show off their skills during the air show.

    The Paris Air Show runs from yesterday to Sunday. It is expected to welcome some 350,000 visitors through its cavernous show halls.