Boeing to Bypass Airbus in Orders
By Daniel Michaels, Jon Ostrower, The Wall Street Journal | Jul. 08, 2012
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Boeing Co. looks set to start Europe's big air show with orders from at least two leasing companies - deals that should help the U.S. plane maker consolidate its lead in orders over Airbus this year.
Airbus also is expected to announce deals at the Farnborough International Air Show this week, including its first-ever order from an Israeli airline, people familiar with the negotiations said.
General Electric Co.'s aircraft-leasing unit and Air Lease Corp., which is run by airplane-leasing pioneer Steven Udvar-Házy, are in talks to announce big orders for Boeing's planned 737 Max, people familiar with the talks said.
Spokesmen for GE Capital Aviation Services, ALC and Boeing declined to comment on possible orders. GE produces the engines on the 737 with Safran SA of France.
Kuwait-based Aviation Lease & Finance Co. also is in talks for the Boeing model, but an order may not be announced at the Farnborough show, which begins Monday near London. Executives at the company weren't available.
United Continental Holdings Inc. in coming days could confirm a long-expected order for 100 of the 737 Max and options to buy 100 more, although its announcement is unlikely to occur at the show, the people said. An airline spokesman declined to comment.
The 737 Max would revise a Boeing's popular single-aisle model, which already has been updated several times. Boeing is trying to catch up with Europe's Airbus, which last year far outpaced Boeing with orders for an update of its competing A320. The update, dubbed the A320neo, has garnered more than 1,400 orders, while the 737 Max has received fewer than 500.
Airbus, meanwhile, is completing deals that could double its number of airplane orders this year when they are disclosed at the air show this week, people familiar with the negotiations said.
Among contracts that the unit of European Aeronautic Defence & Space Co. hopes to unveil in coming days is its first from an Israeli carrier. Arkia Israel Airlines Ltd. is in final talks for Airbus A320-family single-aisle airliners, these people said.
An Airbus deal with Arkia would break a long-standing lock that Boeing has had on the Israeli passenger-jet market. Israel's national airline, El Al Israel Airlines Ltd. several years ago placed an order with Airbus planes, but the contract was later annulled by the government. Arkia executives couldn't be reached.
An Airbus spokesman declined to comment about possible orders.
Airbus also could disclose at the show its first order from UTAir Group for A320-family planes. The Siberian carrier has been a Boeing customer and last year ordered 40 Boeing 737s. UTAir executives weren't available for comment.
Airbus hopes to disclose other orders this week, including one from Philippine Airlines Inc. to increase its fleet of Airbus A330 long-range planes. The carrier didn't respond to a request for comment.
Cathay Pacific Airways Ltd. looks set to increase its order for Airbus's planned A350 model with an order for the large A350-1000 version. An A350 order from the Hong Kong carrier could put Airbus in the black on the model for the year. Airlines through June canceled seven more orders for the plane than they had placed. Cathay already has 36 of the smaller A350-900 model on order.
The possible orders could top 200 planes, according one of the people familiar with the negotiations. Airbus through June had firm orders for 230 planes this year, after cancellations. Boeing, in comparison, had 440 orders net of cancellations through June 30.
Airbus last year posted a record 1,419 net orders and company executives have said they expect fewer this year.
A person familiar with Airbus's plans said it remained unclear how many of the possible orders will be announced during the air show.