Technology Stocks : Boeing keeps setting new highs! When will it split? -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (3262)7/17/2014 10:43:00 AM
From: Eric  Respond to of 3362
Boeing Buoyed at Show With $46 Billion in Day-Three Sales

By Julie Johnsson and Kari Lundgren

Jul 16, 2014 4:09 PM PT

Source: Boeing
777-300 with Qatar Airways livery.

Boeing Co. (BA) escaped Airbus Group NV (AIR)’s shadow on the third day of the Farnborough Air Show as an agreement to sell new 777X jets to Qatar Airways Ltd. drove a $46 billion haul of orders and options.

After dominating Boeing on the first two days of the event, Airbus reported one deal yesterday valued at $1.2 billion at list prices, according to data compiled by Bloomberg Industries. Boeing’s accord with Qatar Airways, which isn’t a completed order, is for 50 of the -9X version along with 50 options.

The agreement nudged Boeing ahead of Airbus in announced sales at the biggest aviation expo, with about $63 billion to the European planemaker’s $61 billion, the Bloomberg Industries tally showed. Even as the industry events at the show wind down today, the manufacturers will be working to ensure that the pledges to buy planes eventually are booked as firm orders.

“This is potentially useful as a guide, but with backlogs the size of the ones at both Boeing and Airbus, it has little near-term impact,” George Hamlin, a former Airbus executive who now runs Hamlin Transportation Consulting, said this week in an interview about the day-by-day sales jockeying.

Qatar Airways doubled its planned purchases of the upgraded 777 in yesterday’s transaction, after firming up a deal for the same number announced at the Dubai air show in November.

Photographer: Duncan Chard/Bloomberg
A model of Boeing's 777X aircraft, manufactured by Boeing Co.

List Prices

The latest agreement has a list value of $37.7 billion, Chicago-based Boeing said. That would make it the biggest deal yet at this year’s show. Boeing’s backlog was 5,197 planes through June, compared with 5,546 for Toulouse, France-based Airbus, according to data compiled by Bloomberg Industries.

Airbus took an early advantage this week after introducing an updated version of its A330 wide-body with more fuel-efficient engines. Lessors have dominated the deals, with Qatar Airways and AirAsia Group Bhd among the few airline customers.

“The preponderance of lessor orders at the show is largely a function of timing, we believe,” Gary Liebowitz, a New York-based analyst with Wells Fargo Securities, said in a note to clients this week. Lessors over time will command about quarter of the planemakers’ backlogs and own 45 percent to 50 percent of the global aircraft fleet.

Boeing also pulled in an order from China’s Hainan Airlines Co. (600221) for 50 737MAX-8 single-aisle airliners valued at $5.1 billion at list prices, as well as two current-version 737-700s from Air Algerie SpA. MG Aviation, a leasing company, agreed to buy two 787-9, the mid-sized version of the Dreamliner model.

The 777X will be introduced by the end of the decade to follow the current 777, a long-range wide-body jet that boasts the world’s largest commercial engine. Only one buyer formally expressed interest in Airbus’s competing A350 this week: Air Mauritius Ltd. took options on four planes.

To contact the reporters on this story: Julie Johnsson in Farnborough, England, at; Kari Lundgren in Farnborough, England, at

To contact the editors responsible for this story: Ed Dufner at; Benedikt Kammel at Stephen West

To: JakeStraw who wrote (3262)12/11/2014 8:46:15 AM
From: Eric  Respond to of 3362
Originally published December 10, 2014 at 9:56 AM | Page modified December 10, 2014 at 7:22 PM

With no new orders for huge A380, Airbus raises prospect of ditching jet

Airbus Group raised the prospect of discontinuing its A380 superjumbo as soon as 2018, the first admission that it may have misjudged the market for the double-decker after failing to find a single airline buyer this year.

By Andrea Rothman

Bloomberg News

An Airbus A380 aircraft, operated by Korean Airlines, is displayed at the 2011 Paris Air Show.

Airbus Group raised the prospect of discontinuing its A380 superjumbo as soon as 2018, the first admission that it may have misjudged the market for the double-decker after failing to find a single airline buyer this year.

While Airbus will break even on the plane in 2015, 2016 and 2017, that outlook doesn’t hold for 2018, forcing the company to either offer new engines to make the A380 more attractive or discontinue the program, Chief Financial Officer Harald Wilhelm told investors at a meeting in London on Wednesday.

His comments come as 2014 shapes up to be the first since the double-decker entered service without a new airliner customer. Its only buyer was a leasing company that has yet to line up a single carrier to take any of the 20 planes it ordered. The backlog remains as thin as it is fragile, highlighted by the cancellation of six jets ordered by Japan’s Skymark Airlines, with two close to handover.

In its seventh year in operation, the aircraft that cost $25 billion to develop threatens to become a costly misstep. While popular with travelers, most carriers prefer smaller twin-jet models that are more fuel efficient and can access more airports. Emirates is the only stand-out sponsor, having ordered 140 units, while other airlines have either backed off or are struggling to fill the two decks of the jumbo.

“It’s an excellent plane, but it only works for the right destinations,” said Air France-KLM Group Chief Executive Officer Alexandre de Juniac, who aims to cancel the last two of a dozen A380s on order and swap them for smaller models.

Chris Buckley, Airbus’ executive vice president, Europe, Asia and Pacific, said the company has been “at fault” in the way it marketed the aircraft, letting carriers customize the interiors rather than pushing the high-density credentials of the double-decker.

The four-engine widebody airliner is a rarity, after Airbus killed its A340. Boeing said Tuesday that it will cut back production of its 747 jumbo to 16 a year from 18 in 2015.

Emirates President Tim Clark is pushing Airbus to upgrade the A380’s engines to improve fuel efficiency, a move Airbus is resisting because the cost of doing so doesn’t match demand for the plane. Keeping the plane unchanged may mean running down the backlog and eventually shutting down production, now at just under 30 a year, analysts said.

“Airbus will be obliged to make a decision one way or the other in 2015,” said Yan Derocles, an analyst at Oddo Securities in Paris, who estimates an engine upgrade may cost Airbus 2 billion euros ($2.47 billion) because of work required on the wing.

An engine upgrade would take about four years, according to Derocles. The A380 now comes with a choice of engines either by Rolls-Royce Holdings or a joint venture between General Electric and United Technologies’ Pratt & Whitney.

The A380’s lackluster demand contrasts with a boom in orders for other models. Airbus’ best-seller remains its A320 family of single-aisle jets, which it made even more popular by offering new engines. The same concept added momentum to the A330 widebody jet.

The all-new A350, a twin-engine long-range widebody plane made of advanced lightweight materials, has almost 800 orders before its first handover.

Airbus has won orders for 318 of the jumbos. That’s a fraction of the 1,200 it thought airlines needed in that size category when it started marketing in 2000. Emirates accounts for 40 percent of the order book, while airlines including Virgin Atlantic Airways, Hong Kong Aviation and Air Austral are increasingly unlikely to ever take their planes.

Japan and China, originally seen by Airbus as key markets for the A380, have been disappointments, with only one Chinese airline taking five units. Boeing’s 747-8, the only rival, has fared even worse, winning 51 orders from four airlines.

“It’s a pity,” Clark, the Emirates president, said of the A380. “It’s a very big cash generator for us. I just open the doors and the people come.”

Emirates has been successful with its fleet of A380s because the airline uses its Dubai hub as a central point to connect major routes around the globe with just one stop. The A380 is also popular on capacity-restricted airports such as London Heathrow, while many smaller airfields lack the infrastructure to accommodate the plane.

Richard Aboulafia, vice president at the Teal Group and longtime critic of the plane, said the new large twin-engine planes coming to the market will be the death of the A380.

“I don’t think it lasts more than a few years into the next decade,” he said of the A380. “The quicker they let go, the quicker they can devote themselves to marketing efforts on other products.”

Copyright © 1995-2018 Knight Sac Media. All rights reserved.Stock quotes are delayed at least 15 minutes - See Terms of Use.