Airshows are traditionally an opportunity for the big aircraft manufacturers to seal the deal on long order negotiations with airlines and leasing companies.
The likes of Canada’s Bombardier and Brazil’s Embraer will look to defeat each other in the smaller-sized jet market, but the headline battle in commercial aviation is conducted between Europe’s Airbus and the U.S.’ Boeing.
The Dubai Airshow 2017 was no different as the big two looked to outdo each other for new business.
Leading into the show, Boeing held a healthy lead over Airbus for orders in 2017, accounting for an estimated 65 percent of new order value. But could the firm stretch that lead or did Airbus manage a fight back in Dubai?
The U.S. manufacturer stunned observers with an opening day order from Emirates for 40 787-10 Dreamliners. The current list price for the deal is $15.1 billion. Emirates will receive the medium twin-aisle plane from 2022.
Azerbaijan Airlines then placed a new order for five earlier models of the same aircraft, the 787-8 Dreamliner. Along with a provisional commitment to buy two large freighters, the deal added another $1.9 billion to Boeing’s order book.
Following that, Ethiopian Airlines doubled a previous commitment to Boeing and will now buy four 777 freighters. The list price for that deal was $1.3 billion. Ethiopian currently has 30 of Boeing’s 737 MAX planes on order as it looks to take advantage of rapid aviation growth in Africa.
Boeing saved its best until the second last day of the airshow, however. It signed an agreement with budget carrier flydubai for 225 737 MAX planes, holding a list price of $27 billion. Boeing said the deal represents the largest-ever single-aisle jet order, by both value and number of aircraft, from any Middle East carrier.
On the last day of the airshow, Boeing signed a final purchase agreement with Kazakhstan’s SCAT Airlines for the purchase of six Boeing 737 MAX 8s. That deal is valued at $674 million. SCAT Airlines also has an opportunity baked into the deal that allows it to purchase another five aircraft at a later date.
Airbus was heavily tipped to announce an Emirates order for 30 new A380 planes on day one of the airshow. The deal never happened and Emirates President Tim Clark offered an indication why, when he explained that Airbus needed to commit to the superjumbo program for at least 10 years.
It wasn’t until day three of the show that Airbus announced a commercial order. Golden Falcon Aviation signed a memorandum of understanding (MoU) for 25 of Airbus’s popular A320neo aircraft. Although the contract value was not unveiled, the list price for one A320neo is approximately $108 million, giving a total order of $2.7 billion. The planes will be used by Kuwait’s resurrected Wataniya Airlines.
Then came the big one. Airbus turned its fortunes around with a mammoth order of 430 jets from the A320 family, worth a list price total of $49.5 billion. The buyer, who will seek financing for the deal, was U.S. private equity firm Indigo Partners. Signing the deal for Indigo was veteran airline investor Bill Franke, who described it as the largest aircraft order ever.
Airbus signed off at Dubai with a $500 million deal to sell Air Senegal two A330neo wide-body aircraft. The airline said it planned to use the plane to develop medium and long-haul routes.
So who won?
Once you total up Boeing’s new business from Dubai you come to an eye-popping list price total of $47.6 billion. But Airbus managed to eclipse that with a combined value of commercial deals in Dubai tallying up to $52.7 billion.
On the face of it then, it was an airshow win for Airbus, who may also soon announce that Emirates A380 order. But while Airbus may have “won” in Dubai, Boeing wasn’t far behind and remains ahead on a year-to-date basis.
It is also vital to remember that these list prices will not actually be paid by the carriers or leasing companies. The actual price paid will include a negotiated discount that is deemed too commercially sensitive to be revealed.