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Farnborough Booming - Another 150 orders announced

22-Jul-2010

Airbus and Boeing are revising their 2010 order forecasts, as more orders roll in at this year’s Farnborough Air Show. The first three days of the show have produced new orders and agreements for over 620 new aircraft, as well as confirmation and attribution of more than 150 older orders - a spectacular result.

Among these order confirmations were agreements for 95 aircraft made by RBS Aviation Capital, the leasing unit of the Royal Bank of Scotland. The company confirmed orders for 43 B737NGs and 52 A320 family aircraft. The aircraft were originally acquired in late 2008 and the first of the B737s have already commenced delivery. Quite why the order was unattributed is unclear, although it may have related to RBS attempts to sell off the leasing unit in 2008 and 2009.

Another order that was confirmed at the Air Show was Crecom Burj Resources’ agreement to purchase 50 of Irkut’s new MS-21. The order was originally placed in Jun-2010, and is for the -100 and -300 variants of the aircraft. Deliveries are set to begin in 2016. The Crecom order is the first announced purchase of the MS-21. Irkut has also signed a MoI with Irkut for 28MS-21s with Ilyushin Finance, as well as options for another 22. Ilyushin Finance stated Irkut still has a lot of work to do before the MoI develops into a firm order.

Sukhoi continues to have a strong show with its Superjet 100 regional jet. The Russian manufacturer banked another two agreements on day three of the airshow. The first is a firm order from Pearl Aircraft Corporation for 30 aircraft, with another 15 options. The second is a LoI from Gazpromavia, for ten aircraft.

Also favouring regional jets was Republic Airways, which signed an LoI for 24 E190s, with a clause that allows it to convert any of the aircraft to larger E195s, if it so wishes. Qantas ordered seven Q400s for its QantasLink regional operation, a nice win for Bombardier, which has only had business aircraft orders at this year’s show. Disappointingly, no new orders for the CSeries have been announced, despite ongoing negotiations with Qatar Airways.

Regional aircraft ordering has been particularly strong at this Farnborough Air Show. Agreements have so far been signed for just over 220 regional aircraft, or around a third of new orders at the air show.

Farnborough Airshow orders by type: Days 1 to 3

Boeing had a quieter day after a flurry of activity at the opening of the airshow, but still announced a number of new orders. The largest was American Airlines' announcement that it converted 35 B737NG purchase options into firm orders. China's Okay Airways also announced a B737NG order, for ten aircraft.

The popularity of Boeing’s B777 continues as well. Qatar Airways and Air Austral ordered two B777-200LRs apiece. It is a welcome follow-on from Emirates’ blockbuster order for 30 on the first day of the show for the US manufacturer.

Airbus' widebody twin-jet, the A330, has also seen strong ordering. After Aeroflot ordered 11 on the first day of the show, Hong Kong Airlines signed an MoU for another 10 on the second. On day three, Garuda Indonesia ordered six more A330-200s, while Thai Airways has selected seven new A330-300s.

The popularity of the existing generation of twin-engine narrowbodies stands in stark contrast to the next generation aircraft being offered by Airbus and Boeing. The B777 and A330 between them have 58 orders, while Airbus has only recorded 15 new A350 orders (conversions from A330s) and Boeing has reported no new B787 orders.

Airbus also secured an order for five A319s from Germania.

Farnborough Air Show aircraft orders: Day 3

Purchaser

Supplier

Aircraft

Quantity

Engines

Value

Notes

Germania

Airbus

A319

5

CFM56-5B

 

MoU

Crecom Burj Resources

Irkut

MS-21

50

   

Confirmation of Jun-2010 agreement

Pearl Aircraft Corporation

Sukhoi

Superjet 100

30

SaM146

USD900 million

Options for another 15

Qatar Airways

Boeing

B777-200LR

2

 

USD501 million

 

ALAFCO

Airbus

A350-900

12

   

Converted existing order from A350-800 to A350-900

Thai Airways

Airbus

A330-300

7

   

MoU

Garuda Indonesia

Airbus

A330-200

6

Trent 700

   

Gazpromavia

Sukhoi

Superjet 100

10

 

USD323 million

Agreement of Intent

RBS Aviation Capital

Boeing

B737NG

43

CFM56-7B

 

Confirmation of late 2008 order

RBS Aviation Capital

Airbus

A320 family

52

CFM56-5B/V2500

 

Confirmation of late 2008 order

Republic Airways

Embraer

E190

24

   

LoI. Option to convert any aircraft in order to E195

Air Austral

Boeing

B777-200LR

2

 

USD501 million

 

Qantas

Bombardier

Q400

7

 

USD218 million

 

Okay Airways

Boeing

B737-800

10

CFM56-7B

USD80 million

 

American Airlines

Boeing

B737-800

35

CFM56-7B

 

Exercised options

Boeing's shares fell 1.1% yesterday and Embraer eased 0.2%, while Airbus' parent EADS rose 1.9% and Bombardier gained 2.8%.

Selected Original Equipment Manufacturers daily share price movements (% change): 21-Jul-2010

Aircastle fell 1.6%, while AerCap advanced 1.4% and FLY Leasing rose 2.7%.

Selected Aviation Suppliers & Leasing daily share price movements (% change): 21-Jul-2010


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