The 2016 Farnborough Air Show kicked off in grand fashion with Airbus and Boeing announcing deals valued at nearly $13 billion on Monday.
In addition to the completed deals, several mega orders worth as much as $20 billion are rumoured to be near completion.
Although there hasn’t been a great amount buzz coming out of North America and Europe, China’s growing airlines arrived at the English air show with check books in hand.
Chinese low cost carrier Xiamen Airlines signed an memorandum of understanding for 30 Boeing 737Max 200 airliners.
The agreement isn’t yet a firm order, however, should Xiamen convert the MOU into one, the deal carries a list price of $3.39 billion. Xiamen, which currently operates more than 140 Boeing jets, plan to expand its fleet to more than 200 planes by the end of the decade and Boeing hopes these 737Max 200s will play role in that expansion.
The Xiamen deal was followed up by an order from Donghai Airlines. Although the airline has traditionally been a cargo carrier since it launched in 2006, Donghai is set to expand its passenger operations. The upstart Chinese airline announced that it will buy 25 Boeing 737Max8 and five 787-9 Dreamliners worth in excess of $4 billion at list prices.
The fact that two of the major deals thus far have come from China should be no surprise. Boeing’s latest projections, that were released on Monday, show that Asia will account for nearly 40% of $5.9 trillion global aeroplane market over the next 20 years. Airbus’ latest projections mirro Boeing’s findings.
Britain’s Virgin Atlantic is the only European airline to announce a deal so far at Farnborough. The crown jewel in Sir Richard Branson’s transportation empire announced on Monday that it will acquire 12 Airbus A350-1000 airliners. The state-of-the-art Airbus jets will be used to replace its ageing fleet of Boeing 747-400 jumbo jets. Eight of the aircraft will be purchased directly from Airbus while the final four will be acquired on long-term leases. The total value of the deal is expected to reach $4.3 billion at list prices.
Finally, the Dublin-based aviation leasing arm of Standard and Chartered bank announced the purchase of 10 current generation Boeing 737-800 jets for an undisclosed client worth just under $1 billion at list prices.
Several mega deals are reportedly near completion.
Bloomberg’s Andrea Rothman and Benjamin Katz reported that Airbus and Malaysia’s AirAsia are close nailing down an order for 100 A321neo airliners worth $12.57 billion at list prices.
Indian low cost carrier is also expected to join in on the action with a deal for 70 Airbus A320neo airliner with a list value of $7.5 billion.
Even with the significant bulk discounts the airlines are likely to receive, Airbus and Boeing are still racking up some impressive sales figures.
All this just from the first morning of the show. Stay tuned. There’s more to come.