This Year’s Farnborough Airshow: A Quiet Airbus – Boeing Battle

Jul 19, 2018

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The big air shows are usually where planemakers outdo each other announcing big orders for new and exciting airplanes. There are three big events, each taking place every other year: The Farnborough airshow outside London, Le Bourget outside Paris, and the Dubai air show. This year was Farnborough, the biggest of the three, the most important gathering of the aviation industry. A TPG team was there, checking out airplanes and tallying up the deals, but one thing stood out: The big airlines have already made all the big purchases they were going to do at this point in the commercial aviation business cycle. At least Until Boeing launches its new airplane — see below for more on this so-far mythical creature.

“There have been orders and some have been exciting. But we weren’t expecting huge announcements at Farnborough nor Paris last year,” said Richard Brown, a leading aerospace consultant at ICF on the sidelines of the event. Still, many interesting things happened at Farnborough, which will translate into changes for passengers all over the world.

Here’s a rundown of what you may have missed.

United Takes More Dreamliners

United Airlines was in for $2.2B worth of Boeing and Embraer Aircraft, of which four were Boeing 787 Dreamliners and 25 were E175 regional jets. The US launch customer of the 787, the airline now has orders for 55 of the aircraft, which revolutionized long-haul flying with its composite-material construction allowing for greater passenger comfort. United was the only US airline announcing new deals at Farnborough; Hawaiian confirmed a previously announced order of 10 787s, with an option to purchase 10 more.

Another Battle: Airbus vs.  Embraer 

The 100 to 140-seat segment battle is heating up, with the two biggest planemakers in the world vying for sales. The rebranded Airbus A220, formerly known as the Bombardier C Series, and the Embraer E2 are the stars of this battle.

In Farnborough, people were watching “to see if there would be a breakthrough in previously sluggish sales,” said Brown.

Airbus delivered on the A220 (with Bombardier laying the groundwork.)

JetBlue announced the purchase of 60 Airbus A220-300 just in advance of the show, dealing a blow to Embraer. And, JetBlue founder David Neeleman and his partners announced their own 60-jet order at the show for a startup US airline dubbed Moxy. Each of these orders will be built at a new Mobile, Alabama plant, Airbus confirmed at the show.

These two orders eclipsed the 50+ orders for the Embraer E2-190 announced at Farnborough. Nevertheless, Embraer still had a strong showing, announcing orders for 24 E2s from Helvetic, 10 from Wataniya Airways from Kuwait, 21 from Azul (also a Neeleman-run shop), and five sold to an unnamed Spanish customer. In addition, Republic Airways signed on for 200 E175, the earlier-generation regional jet, with the option to convert some aircraft to E2 if US scope clauses (restricting use of larger jets for regional carriers) are eased.

Speaking of Embraer…

Weeks before the show opened, Boeing and Embraer signed a memorandum of understanding to create a Boeing-controlled joint venture. Aside from a show press conference, there were no substantive developments in the marriage since the announcement was made. Indeed, each manufacturer was focused on their own sales, with Embraer’s E2-190 aircraft parked far down the ramp from Boeing’s display. “Knock on wood, at next year’s airshow we’ll hit the ground running,” said a source from one of the manufacturers on the sidelines of the show.

Boeing and the NMA

One non-event was the New Mid-market Aircraft (aka the Boeing 797). There was speculation in the months leading up to the show that the planemaker would launch the plane at Farnborough. It didn’t happen. Nevertheless, the NMA (which would fit between the single-aisle 737 and the widebody 787) would allow for point-to-point traffic on routes that can’t support the bigger plane and are too long for the 737.  It’s coming, but not just yet.

Last-Minute Tit-for-Tat: AirAsia picks up A330neos and BA buys Boeing 777ERs

On the last day of the show on Thursday, AirAsia announced an order for 34 Airbus A330-900s —  also known as the A330neo — for a total of 100 of the type on order by the Malaysian carrier. (Delta has an order for 25 from the 2014 Farnborough Air Show.) The deal is worth a whopping $10 billion at 2018 list prices.

Boeing and British Airways announced the British flagship would purchase three Boeing 777ERs—the long-range version of the massive jet. BA is a big Boeing operator, with 58 777s in service,  28 787 Dreamliners and 30+ 747s in its fleet.

The Art of the Deal

Salespeople I spoke with on the sidelines for both Airbus and Boeing agreed on one point: the airshow provides an artificial deadline for the airlines, echoing former Airbus chief salesman John Leahy last year.

“Deals are getting done at the show, for sure,” said a source at a leading manufacturer. “The airlines want the publicity that comes at the show. The journalists are here. The industry is here. And people buy from people,” he said.

“I mean, look what happened at the Dubai airshow,” referring to an incredible moment at the Dubai airshow in 2017.  There, Airbus was set to announce an order for A380 aircraft with Emirates, with the press release prepared and the signing ceremony about to begin. Instead, Boeing swooped in and closed a deal for Boeing 787 aircraft with the Airbus team slinking out the back door as the conference began.

“Farnborough had hundreds of orders but mostly single-aisle jets,” said Richard Aboulafia, an aerospace consultant in an email to The Points Guy. “It was not a record show but perhaps above average.”

Nevertheless, Ihssane Mounir, Boeing’s VP of Commercial Aircraft Sales, was a busy man at Farnborough 2018. He and his team did much of the legwork leading up to the announcements. The affable Mounir took over the role in 2016 and quickly made a name for himself with scoops such as the Emirates 787 purchase at Dubai.

“Listen, nothing happens last minute at the airshows,” said Mounir on the sidelines of the show. “It’s months of teamwork leading up to it.”

Stay tuned for more teamwork and more orders leading up to the next shows in 2019, in Paris and Dubai.

Featured image of an Airbus A330-900 and a Boeing 787-8 at the Farnborough Airshow by Zach Honig / The Points Guy

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