Associated Press and Bloomberg News
FARNBOROUGH, England — The Boeing Co. announced a deal with a leasing company for a second consecutive day as a General Electric Co. unit agreed to buy 100 of the planemaker’s top-selling 737 single-aisle model.
GE Capital Aviation Services committed to take 75 of the upgraded MAX version and 25 of the current model of the 737, Boeing said Tuesday in a statement at the Farnborough International Airshow outside London. The purchase will be converted to a firm order once details are completed, Boeing said.
Airbus also made a big announcement Tuesday, its first multibillion-dollar deal at the air show. Cathay Pacific has ordered the long-haul A350-1000.
The GECAS 737 deal would have a list value of $9.25 billion, based on Chicago-based Boeing’s retail prices for the 737 MAX-8 and the 737-800 planes in the agreement. Airlines typically buy at a discount.
“GECAS is a leader in the airplane leasing and financing industry with a successful track record of placing 737 with airlines worldwide,” Ray Conner, president of Boeing Commercial Airplanes, said in a statement.
Kuwait airplane leasing company ALAFCO also announced on Tuesday a commitment for 20 Boeing 737 MAX 8s valued at $1.9 billion at list prices.
“This is the first commitment for the 737 MAX from the Middle East which is one of the aviation industry’s highest growth regions,” said Conner.
That deal, like GECAS’s, will become a firm order when the details are completed, Boeing said.
Boeing opened the Farnborough show, the year’s highest-profile trade event for the aerospace industry, with the announcement of an order for 75 737s from Steven Udvar-Hazy’s Air Lease Corp. That sale included 60 MAX planes in the first such deal with a lessor.
Boeing also is likely to announce a big 737 MAX order from United this week.
The deals, if closed out as most commitments do, will help the Chicago-based company claw back ground lost to rival Airbus in the short-haul market. At last year’s gathering in Paris — the French capital and Farnborough alternate — Airbus stole the show from Boeing with its remodeled airplane, the A320neo.
In the run-up to the airshow south of London, expectations were high that Boeing would announce a raft of short-haul deals as it tries to catch up with Airbus in orders for single-aisle aircraft.
It is pushing the MAX model heavily in response. The MAX incorporates new technologies designed to make the aircraft more efficient, reliable and comfortable. So far, Boeing has secured orders and commitments for more than 1,000 of the aircraft.
Airbus, meanwhile, announced that Hong Kong-based Cathay Pacific has put in a firm order valued at $4.2 billion for the A350-1000.
“The A350-100 will be a game changer in the 350-seat category, offering outstanding payload-range capability and a 25 percent reduction in fuel burn,” said Fabrice Bregier, Airbus president and CEO. “As an all-new design, it will outperform existing aircraft in its size category on every count, as well as any future derivatives of those aircraft.”
Cathay will place a new order for 10 aircraft and convert 16 of its existing orders for the A350-900, a previous edition of the long-haul plane, to the larger A350-1000, which is valued at $320 million each. The deal is subject to Cathay’s board passing it through and takes the total number of A350 aircraft ordered by the airline to 46.
John Slosar, Cathay’s chief executive said the A350-1000’s “improved payload and range will allow us to connect more and more important cities worldwide directly with Hong Kong.”
Also Tuesday, Canada’s Bombardier Aerospace said Latvia-based airBaltic had signed a letter of intent to buy 10 CS300 aircraft and take purchase rights on a further 10 of the jets. At list prices, the deal would be worth around $764 million and could increase to $1.57 billion should the rights be taken up.
The deal, should it go through, represents another success for the Canadian planes and trains maker in the competitive short-haul market. Earlier this week, Bombardier also said it had a conditional order for five CS100 and 10 CS300 aircraft placed by an unidentified customer.
“The diversity of the C Series aircraft customers … speaks volumes about the flexibility of the aircraft to serve diverse transport needs worldwide,” said Mike Arcamone, president of Bombardier’s commercial aircraft division.
This year’s airshow is taking place at a time when the global economy is showing signs of slowing down and governments around the world are cutting back costs on military spending as they grapple with high debt levels. The combination of a faltering economy and lower government spending is a difficult combination for the aviation industry as air travel tracks global economic growth.