Airbus announces major deal with Cathay Pacific

Airbus has won a potential £2.8bn order for its A350 passenger jet, its first major deal at a subdued Farnborough Airshow, where a faltering global economy was casting clouds as dark as the skies over southern Britain.
By The Newsroom
Published 11th Jul 2012, 07:00 BST

The deal with Hong Kong airline Cathay Pacific is a major boost for the European planemaker, which has been struggling to sell its A350-1000 mini-jumbo and make a dent in Boeing’s hold on a lucrative corner of the jet market, just below 400 seats.

Separately, Boeing announced a deal to sell 100 of its next-generation narrowbody 737 planes to aircraft leasing firm GECAS, worth around £6.2bn at list prices.

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That is Boeing’s second big deal for the revamped plane in as many days, bolstering its fightback against Airbus’s A320neo in the top-selling short-haul segment of the market.

Both deals, however, were well flagged in advance of the show, where there have so far been no major surprises.

Boeing and Airbus, which battle for the bulk of a jet market estimated at above £66bn a year, played down expectations ahead of the aerospace industry’s showcase gathering, saying their order books are already bulging.

They say demand remains strong as airlines modernise fleets to survive high fuel costs and the balance of growth shifts towards Asia, with Boeing raising its long-term industry forecasts last week.

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However, some investors say the euro zone debt crisis and slowing economic growth in China could see orders delayed or cancelled, and that some recent deals suggest Airbus and Boeing are descending into a price war.

Cheuvreux analysts predicted the Farnborough week would produce a combined 300-400 orders for Airbus and Boeing, less than half the number in Paris last year.

Airbus, owned by European aerospace giant EADS, said that as well as planning to buy 10 new A350-1000 aircraft, Cathay Pacific would convert an existing order for 16 A350-900 jets to the larger model.

The carbon-composite A350 spans two categories of aircraft, aiming to challenge the Boeing 787 Dreamliner as well as the United States company’s most profitable plane, the 777 mini-jumbo.

Boeing, meanwhile, said GECAS had committed to buy 75 of its 737 MAX 8 planes as well as 25 of its next-generation 737-800.

Related topics:AirbusBritainHong Kong