New Pilots

Airbus working on multiple Farnborough deals

2016 07 12

Airbus struck a preliminary deal to sell 72 single-aisle jets to India's GoAir on Tuesday and was negotiating over the sale of 100 more to another Asian airline to try to seize the initiative at a rain-soaked Farnborough Airshow.

GoAir said it had signed a memorandum of understanding to buy 72 of the latest version of Airbus's top-selling A320 aircraft, worth around $7.7 billion at current list prices.

Meanwhile, AirAsia Chief Executive Tony Fernandes flew into the UK to finalise an order for 100 A321neo jets to support the airline's expansion plans, confident of striking a deal at bargain prices as planemakers brace for a slowdown.

One source familiar with the negotiations said the jets could be sold to AirAsia for less than its previous large order for the smaller A320neo model, though Airbus sales chief John Leahy said earlier A321neo prices were improving.

Some of the new jets will be for the Malaysian-based airline's leasing business, sources said.

Last-minute dealmaking extended to the engine makers, as CFM and Pratt & Whitney compete for the right to supply engines for the A321neos, with some negotiators huddled over papers in the corner of an airline award ceremony.

Europe's Airbus and U.S. rival Boeing have enjoyed years of strong growth thanks to rising air travel and demand for new fuel-efficient models.

On Monday, they both increased their forecasts for aircraft demand over the next 20 years, betting rising wealth in Asia would continue to boost airline passenger numbers.

But analysts are worried growing risks to the global economy, from slowing growth in China to Britain's decision to leave the European Union, could dry up orders or even lead to some cancellations.

Indeed, air show participants report a lower level of dealmaking than in recent years.

Underscoring the growing clout of Asia and the Middle East in the industry, Qatar Airways announced a deal to buy up to 10 percent of Latin America's largest airline LATAM Airlines in a $613 million deal.

That follows the Gulf airline's purchase last year of 15 percent of British Airways owner International Airlines Group , which like Qatar and LATAM is a member of the Oneworld airline alliance.

Boeing, meanwhile, said an undisclosed Chinese customer had signed a commitment for 30 of its 737 family of planes, in a deal worth more than $3 billion at current list prices, while China's Kunming Airlines signed a memorandum of understanding to buy 10 737 MAX 7 planes, worth $660 million at list prices.

Airbus announced an order from German airline Germania for 25 A320neos, worth $2.6 billion at list prices.

Air Asia Malaysia / Air Asia X



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