Cathay seen front-runner to ease A350 drought
By Editor - Mon Jul 09, 11:32 am
(Reuters) – Airbus will be looking for a long-awaited new order for its A350-1000 mini-jumbo at this week’s Farnborough Airshow, with Hong Kong’s Cathay Pacific tipped as most likely to end a three-year order drought, industry sources said.
Cathay Pacific has 36 of the A350-900 base model on order, and may add on further orders for the stretched A350-1000 or convert some of its existing orders, or both, the sources said.
Airbus says the future 350-seat carbon-composite passenger jet will be much more efficient than Boeing‘s (BA.N) 777 but has so far been unable to make a significant dent in the 777′s hold on a lucrative corner of the jet market, just below 400 seats.
Due in service from 2014, the A350 is Airbus’s response to the Boeing 787 Dreamliner, the first in a new generation of lightweight carbon-composite jets designed to consume less fuel.
Spanning two categories, it also challenges the older 777 which leads the market for large-capacity long-range twinjets.
Airbus has started building the first A350-900 test aircraft and has a total of 548 of the A350 family aircraft on order.
Sales of the A350-1000 mini-jumbo are disappointing, however, accounting for 62 of the 548.
Some Middle East airlines have complained about its range and payload capacity, prompting Airbus and engine maker Rolls-Royce (RR.L) to bolster the engine design and relaunch the aircraft at the Paris Air Show last year.
Airbus attributes slow sales of the A350-1000 to the lack of availability before late in this decade, but Boeing continues to post strong sales of the 777 which had a record year in 2011.
Boeing is touting a more efficient 407-seat version of its most profitable jet with new engines to try to stay ahead of the A350-1000 which is based on a lighter fuselage.
Airbus sales chief John Leahy said last month the planemaker could announce an A350-1000 order at the July 9-15 show.
That adds to what some air show delegates say could be a busier-than-expected event for Airbus, which tends to spring air show surprises, while Boeing is ratcheting down expectations by insisting it builds up its portfolio over the whole year.
As the order guessing game built up on the eve of what promises to be rain-sodden air show, business expected at Farnborough included purchases of the Boeing 737 MAX by lessors Air Lease and Alafco and a possible scalp for Airbus with an order from Russian airline UT Air.
Arkia Israel Airlines was also expected to order aircraft.
Both manufacturers have left scope for surprises. Boeing’s new commercial aircraft division chief executive Ray Conner told reporters he expected a “decent” air show – a slightly more downbeat forecast than one from his predecessor Jim Albaugh, who said in Beijing last month he expected a “very good” event.
Airbus’ Leahy said in an interview last week he did not expect to sell as many aircraft as Boeing at Farnborough. Industry sources expect Airbus to log sales or commitments of about a quarter of the 1,000 it took last year, when it created a frenzy of demand with a revamped A320.
Boeing is expected to bounce back this year with a competing model and may overtake its rival for the first since 2006.
Boeing Chief Executive James McNerney told European newspapers on Sunday that having done so it could outsell Airbus for “a number of years”.
The two planemakers have most of the market for narrowbody short-haul planes and control all the market for wide-bodies.
Including smaller competitors, global jet sales are estimated at approximately $100 billion a year.
Airbus and Boeing go into the show engaged in a bitter contest for market share after the switch to more fuel-efficient short-haul models, the industry’s bread and butter, shook up a market estimated at $2 trillion over 20 years.
The firefight has included a back-and-forth battle for 40-50 jets worth $4-5 billion sought by Istanbul-based budget carrier Pegasus Airlines, with Boeing trying to prevent the 737 operator defecting to Airbus, industry sources said.
Boeing has accused Airbus of aggressive pricing and vowed recently to defend its share of the market, but Leahy said it was the “height of arrogance” to suggest airlines could not switch from one planemaker to the other.
Airbus faced a surprise challenge from a different quarter on the eve of the show, however, as Reuters reported Canada’s Bombardier (BBDb.TO) was in talks with AirAsia (AIRA.KL) over a 160-seat CSeries.
Chief executives of the two companies met at the Silverstone
British Grand Prix race track at the weekend. AirAsia is a flagship Airbus customer and is in talks to buy another 50 A320s on top of a record 200-jet order last year.