Planemakers' order books bulge on Asia, Middle East demand

PARIS - Airbus and Boeing opened the Paris air show with a flurry of multi-billion-dollar plane deals on Monday as demand from Middle Eastern and Asian airlines swelled their already bulging order books.

Airbus signed up Saudi Arabian Airlines to be the launch customer of its new A330-300 Regional aircraft, with the carrier taking 20 of the planes as well as 30 A320neo jets in a deal worth about $8.2 billion at list prices.

The European planemaker also said Garuda Indonesia (GIAA.JK) had signed a letter of intent to buy 30 A350 XWB jets, potentially worth around $9 billion.

The same airline, meanwhile, committed to buy up to 30 of Boeing's (BA.N) 787-9 Dreamliners and 30 737 MAX 8 jets in a deal that could be worth about $10.9 billion.

Despite the flurry of activity, analysts expect this year's gathering of the aerospace industry to produce fewer blockbuster orders, with the focus turning to the challenge of producing the $1.8 trillion of jets already sold.

Nonetheless, demand remains robust, particularly from fast-growing Middle Eastern and Asian airlines.

Airbus on Monday raised its 20-year forecast for jet demand by nearly 4 per cent to 32,600, driven by growth from these regions.

That broadly echoed Boeing's assessment of the market last week.

The US group also said on the eve of the air show that it was exploring a potential market of more than 1,000 jets in a niche between its single-aisle 737 and wide-body 787, but had not decided whether to invest in a new plane.

Many in the industry, however, are increasingly wary about an order backlog stretching out over almost a decade.

GE Aviation said on Monday it wanted to secure a record increase in production of engines for Airbus and Boeing single-aisle aircraft before deciding whether it could guarantee going even higher.

Heading into the air show, Airbus had a lead over Boeing in plane orders this year, with 247 versus Boeing's 175. However, the US group won the annual order race last year.

Adding to Monday's flurry of deals, GE's aviation leasing and financing arm, GE Capital Aviation Services (GECAS), announced an order for 60 Airbus A320neo-family aircraft worth around $6.4 billion based on list prices.

At 6.05 a.m. EDT, Airbus shares were down 0.2 per cent at 60.33 euros in a European blue-chip index .FTEU3 off 0.9 per cent.