The recent divergence in fortunes of the world’s dominant planemakers was on full display at the biennial industry beauty contest, where the companies typically confirm orders for hundreds of jets.
Airbus (EADSF) opened the show by pulling back the curtain on the A321XLR, a new single-aisle aircraft with a longer range than variants of its popular A321neo. The jet will enter service in 2023, and ramp up the pressure on Boeing in the market for smaller planes that can fly long routes.
It quickly followed that up by announcing three new orders.
Middle East Airlines, the flag carrier of Lebanon, became the launch customer for the A321XLR by ordering four of the jets. Virgin Atlantic inked a deal for 14 A330-900s, a wide-body jet that occupies a market segment where Airbus has struggled recently. The largest order came from Air Lease Corporation for up to 100 planes including 27 A321XLRs and 50 A220-300s.
Boeing (BA) and Airbus have both netted 500 firm orders at each of the past three editions of the Paris Air Show, according to the investment bank Cowen, with options for additional aircraft topping 700.
Yet Boeing had little positive news to trumpet on Monday.
It announced a deal with GE Capital Aviation Services for 10 converted freighters based on the 737-800. The buyer has the option to acquire up to 15 additional planes.
Because the freighters are fashioned from previously delivered passenger jets, they do not count as official new orders. They will bring in some cash for Boeing, however.
With some 737 Max operators demanding compensation from Boeing over the grounding, there’s unlikely to be much demand for the plane in Paris.
“Nobody seems to wants to be first to order a Max,” said Cai von Rumohr, an aerospace analyst for Cowen.
Boeing executives opened the show by seeking to reassure potential buyers that the 737 Max will soon return to global service following crashes of planes operated by Ethiopian Airlines and Lion Air, which lost 346 lives.
“Words simply cannot express the sorrow and the sympathy that we feel for the families and the loved ones of those that were lost in these tragic accidents,” chief financial officer Greg Smith told reporters in Paris.
“We’ve been working with the FAA and regulators around the globe to ensure that we’re answering all of their questions and addressing any concerns that they may have,” he added.
Analysts said that an order for the 737 Max in Paris could help Boeing change the narrative around the troubled aircraft. Heavy discounts could help break the logjam.
New orders are scarce
“It’s in the interest of both Boeing and Max customers that confidence in the plane be bolstered,” said von Rumohr. “An order announcement, even if conditioned on a grounding lift, would help the cause.”
Other factors may result in weaker orders for both Airbus and Boeing.
Both aircraft makers are seeing their sales limited by huge orders in recent years, which resulted in backlogs of thousands of jets for which customers are waiting.
“Everyone who needs a single aisle, next generation jet already has ordered them,” said Richard Aboulafia, aerospace analyst with the Teal Group. “There are 11,000 on order. People have what they need.”