Farnborough Recap 13 July
Majors score sales, but overall tempo slowing at Farnborough
Global manufacturers Airbus and Boeing scored some big sales on the second day of the Farnborough Airshow but the tempo of sales compared to years past is tapering off following past huge commitments. Asia-Pacific was the key region with both manufacturers landing orders from carriers there.
Boeing announced a commitment for 30 737 airplanes from an unidentified Chinese customer that includes a mix of 737 MAX and Next-Generation 737 aircraft valued at more than US$3 billion at list prices.
Boeing also announced it had signed a memorandum of understanding (MOU) for 10 737 MAX 7 airplanes with Kunming Airlines, an all-Boeing fleet customer in China, which will make the carrier the launch customer in China for the improved 737 MAX 7 airplane.
“We look forward to welcoming Kunming Airlines as a 737 MAX 7 launch customer in China and finalising the deal in the near future,” said Boeing Commercial Airplanes president and CEO Ray Conner. “These new airplanes will support Kunming Airlines’ strategic plan to establish an extensive flight network throughout China and increase their global reach.”
Kunming Airlines, based at Changshui International Airport in the capital city of Yunnan province, began operations in 2009. The carrier currently serves more than 40 cities across China with a fleet of eight 737-700s and 11 737-800s. Shenzhen Airlines is the major shareholder of Kunming Airlines.
Boeing also announced it had secured a new order for six 737 MAX 8s from Air Lease Corp., which is valued at US$660 million at list prices.
“ALC already has lease agreements in place with seven different airlines for 737-8 MAX aircraft out of our Boeing delivery stream, starting in the fourth quarter of 2017,” said Steven Udvar-Hazy, executive chairman of Air Lease.
Meanwhile, Boeing also announced that it finalised an order with TUI Group for 10 737 MAX 8s and one 787-9 Dreamliner. The order, valued at US$1.4 billion at current list prices, also includes an option for one additional 787-9. TUI Group now has three unfilled orders for 787-9s and 70 for the 737 MAX.
Airbus wasn’t left out in the cold by any stretch as it announced that Asian low-cost carrier AirAsia had signed a firm order for 100 A321neos in a deal valued at US$12.6 billion at list prices. The contract marks the first order placed by AirAsia for the largest model in the A320 family.
The order takes AirAsia’s total order number to 575 A320 family jets, making it the biggest customer for Airbus in the narrowbody line. Airbus said in its announcement that to date, more than 170 A320s have already been delivered to the airline and are flying with its units in Malaysia, India, Indonesia, Japan and the Philippines.
Tony Fernandes, AirAsia group chief executive officer said “AirAsia Group currently operates close to 1,000 flights per day to more than 120 destinations in 24 countries. We recorded a robust load factor of 85 percent in the first quarter of 2016, up 8 percentage points from the same period last year, and we are confident of maintaining this momentum going forward. The A321neo will help us to meet ongoing strong demand as well as further reduce our cost per available seat kilometer across the group, which will translate to lower air fares for our guests.”
Fernandes also said its A321neos will be operated on the airline’s most popular routes and especially at airports with infrastructure constraints.
Asian budget carriers, following the growth of AirAsia, have purchased hundreds of jets from Airbus and Boeing in years past but are slowing their buying decisions. In 2013, Indonesia’s PT Lion Mentari Airlines ordered 234 planes from Airbus, the carrier’s second purchase contact for more than 200 aircraft.
Separately, India’s GoAir said it had signed a “preliminary agreement” with Airbus to buy 72 A320neos in a deal valued at US$7.7 billion at list prices. It already has an existing order 72 of the same model that it made in 2011. India is a hot market for plane makes with low-cost carrier IndiGo saying in 2015 it had a commitment to buy 250 Airbus planes worth US$27 billion.
In other news from Farnborough:
Airbus, Rolls team up for Cathay A350 service
Airbus and Rolls-Royce have teamed up for a part availability service for Cathay Pacific Airways’ A350 fleet. The new service encompasses airframe and engine Line-Replaceable-Unit components and integrates the Airbus “Flight Hour Services” and the Rolls-Royce TotalCare Availability service. The airframe and engine parts will be hosted in the same warehouse in Hong Kong so that they can be made available locally when needed.
Asian airlines in Skytrax wins
Several Asian airlines made the top 10 in the globally watched Skytrax awards. Emirates was named the world’s top airline with Qatar Airways coming in second. Singapore Airlines was No. 3 with Cathay Pacific coming in fourth. ANA All Nippon Airways came in fifth while EVA Air was No. 8 and Qantas Airways came in ninth. Central Asian carrier Air Astana, the flag carrier of Kazakhstan, was also named “The Best Airline in Central Asia and India” for the fifth consecutive year. The Skytrax World Airline Awards are recognised throughout the world as a valued benchmarking tool that measures passenger satisfaction among business and leisure travellers, across all cabin classes.
AFI KLM E&M wins Thai A350 deal
AFI KLM E&M said it won a deal with Thai Airways covering component support for its future fleet of Airbus A350s, with 12 aircraft scheduled to join the airline’s fleet this summer. AFI KLM E&M was selected as an MRO for Thai Airways, providing a wide array of services including access to its global pool of A350 components, maintenance, logistics, and a comprehensive material support at Thai Airways main base in Bangkok. In 2015, AFI KLM E&M won a similar large-scale contract for the eight Boeing 787s ordered by Thai, six of which are currently in revenue service.
Aergo buys 2 737s
Aergo Capital announced that it purchased two B737-900ER aircraft from PT Lion Mentari, operating as Lion Air. The acquisition was facilitated by Transportation Partners. The aircraft will continue to be operated by Lion Air on domestic and international commercial routes. Financial details were not disclosed. The acquisitions bring Aergo’s fleet to 26 aircraft including owned aircraft and aircraft under management.
Asian Airlines signs deal with UTC
UTC Aerospace Systems, a unit of United Technologies, said it has been selected by Asiana Airlines to provide landing gear MRO services for its fleet of Boeing 747-400 aircraft. The work will be performed at the UTC Aerospace Systems Centre of Excellence in Miami. Financial details were not disclosed.
P&W’s Singapore centre joins Engine Alliance
Engine Alliance announced it is adding two new engine overhaul centres to the GP7200 MRO network. The Emirates Engine Maintenance Centre in Dubai and Pratt & Whitney Eagle Services Asia are the new entrants. Previously a centre of excellence for GP7200 low pressure compressor overhauls, P&W’s Eagle Services in Singapore will now become a full engine overhaul centre. Engine Alliance is a 50-50 joint venture of GE and Pratt & Whitney. Revenue-sharing partners include MTU Aero Engines of Germany, SAFRAN Aero Boosters of Belgium and SAFRAN Aircraft Engines of France.
IHI Japan joins GE9X programme
GE Aviation announced it has finalised agreements with IHI Corporation, Safran Aircraft Engines and Safran Aero Boosters as participants in the GE9X engine programme. GE9X engine program participants play a significant role, producing a combined total of about 25 percent share of the components for the GE9X engine that will power the Boeing 777X aircraft. With headquarters in Japan, IHI is responsible for the design and manufacturing of various components in the low-pressure turbine and the fan mid-shaft. IHI is a participant on the CF34, GE90, GEnx and Passport engine programmes and has been producing GE military engines under license for more than 60 years. Meanwhile, GE also announced that Lufthansa Technik AG and GE Aviation signed new long-term agreements for maintenance services for the GE9X and GEnx-2B engines. Financial details were not disclosed for any of the agreements.
AWAS orders engines for A320ceos
Aircraft lessor AWAS said it has ordered CFM International’s CFM56-5B engine to power 10 new Airbus A320ceos that are part of a 15-aircraft order the company announced with Airbus on June 23 and the engine order is valued at US$320 million at list prices. Dublin-based AWAS became a direct order CFM56-5B customer in 2008 with an order to power 45 firm and up to 55 option A320 family aircraft. Today, the company has more than 150 CFM-powered aircraft under management.
ST Engineering scores new deals
Singapore Technologies Engineering (ST Engineering) announced that its aerospace arm has secured new contracts worth US$571 million in the second quarter of 2016, for projects ranging from airframe maintenance and cabin interiors, to engine wash, and component repair and overhaul. Included in the contracts are line and heavy airframe maintenance for commercial airlines and military operators, as well as cabin interior modifications for various customers.
Mitsubishi Aircraft signs LOI for MRO services
Mitsubishi Aircraft Corp said it has partnered with three MRO providers as “preferred” partners for airframe maintenance on its MRJ regional jet and has signed letters of intent with HAECO Americas, Pemco World Air Services and MRO Japan separately for future collaboration to provide these services. Mitsubishi Aircraft plans to field multiple partners around the world as preferred airframe MRO service providers. MRO Japan is a wholly-owned subsidiary of ANA Holdings established in June 2015. Headquartered in Naha, Okinawa, the company provides aircraft maintenance, modification and painting services at Osaka International (Itami) Airport for its customers among major airlines in Japan.
