By Tim Hepher
FARNBOROUGH, England (Reuters) – Airbus
The order, worth some $3 billion at list prices, could perk up Monday’s opening of an event clouded by geopolitical uncertainty, including Britain’s decision to leave the European Union and concerns over the state of the global economy.
British Prime Minister David Cameron will attend the opening day, where he is expected to finalize multi-billion dollar deals with Boeing
Industry sources said Airbus’s A350-1000 deal with Virgin Atlantic provided a shot in the arm to a 366-seat model promising greater efficiency but whose sales have slowed as Boeing develops a larger version of its 777, prompting a game of leapfrog between the only two makers of long-haul jets.
Airbus declined to comment and Virgin Atlantic was not available to comment.
Airbus and Boeing have enjoyed years of strong demand, helped by rising airline travel particularly in Asia and the Middle East and new, more fuel-efficient planes.
But with the industry’s order backlog standing at a record 13,500 planes at the end of 2015, or 9.6 years of production at current rates, analysts are worried that economic risks – from slowing growth in China to Britain’s move to leave the EU – could see orders dry up and some even canceled.
Larger, more expensive twin-aisle planes are likely to be most at risk. Indeed, industry sources said Virgin Atlantic, which has long deferred an order for six of Airbus’s A380 superjumbos, looked set to finally cancel it.
Separately, industry sources said privately-held German airline Germania was close to placing an order with Airbus for around 25 A320-family jets, potentially worth more than $2.5 billion at list prices.
That deal for Airbus’s top-selling single-aisle plane, if confirmed, would also be a disappointment to Boeing, which tried to wrestle back its former customer on the eve of the air show, the sources said, asking not to be named.
Germania operates both Airbus and Boeing jets but has said it aims to harmonize its fleet by switching to all-Airbus aircraft when it takes older Boeing 737-700s out of service.
Germania officials could not immediately be reached for comment. An Airbus spokesman said: “We do not comment on confidential talks which may or may not be happening with our customers.”
Among other potential deals at Farnborough, Boeing is expected to firm up at least part of a deal for up to 20 747-8 freighters from Russia’s Volga Dnepr, boosting its declining jumbo jet program, and could announce a new Asian customer for its 737 MAX 200 jet aimed at low-cost carriers.
The U.S. company announced a preliminary deal with Volga Dnepr last year.
In a sign of growing competition in the single-aisle jet market, meanwhile, Boeing is expected to relaunch the smallest version of its 737 MAX series by adding more seats to make it more economical for airlines, after negotiating the change with buyers including Southwest Airlines
Airbus is expected to talk up the recent sales success of its A321neo, the largest member of its medium-haul family, as Norwegian Air
(Editing by Mark Potter)