Boeing declared victory in its multibillion-dollar sales competition with Airbus at this week’s Farnborough International Airshow — but the details are murkier than usual, in part due to international trade frictions.
Boeing chalked up 528 orders and commitments for airplanes during the show. Airbus’ corresponding tally came to 431, including up to 60 of the A220 jets formerly known as the Bombardier CSeries. Those single-aisle jets would go to a new airline called Moxy, with the first deliveries due in 2021.
To counter that Airbus-Bombardier partnership, Boeing struck a deal of its own earlier this month with Brazil’s Embraer to market small-size passenger jets.
Farnborough’s list-price sales total for Boeing added up to $98.4 billion on the commercial airplane side of its business, and $2.1 billion on the services side. Airbus’ corresponding number shaped up in the range of $50 billion to $60 billion, according to 24/7 Wall Street.
“Boeing led the way at Farnborough, demonstrating value for our customers, capturing important new business in products and services, and announcing the unique strength of our strategic partnership with Embraer,” Boeing CEO Dennis Muilenburg said in a news release.
With $100 billion in orders and commitments at #FIA18, #Boeing led the way at Farnborough, showcasing its proven portfolio and how #thefutureisbuilthere. #BoeingFIA https://t.co/a34yMTfdMl pic.twitter.com/S6PWoP1lZY
— The Boeing Company (@Boeing) July 19, 2018
Looking longer-term, Boeing gave a 4.1 percent boost to its 20-year airplane market outlook: The company estimates that commercial jetliner demand will call for 42,730 new planes valued at $6.35 trillion between 2018 and 2037. When the estimated demand for $8.8 trillion in services is added in, the total figure exceeds $15 trillion.
The market projections don’t directly factor in dramatic departures from the trend line — either on the upside due to innovations such as autonomous flight or electric propulsion, or on the downside due to trade tensions.
At the air show, Muilenburg told CNBC that “the aerospace marketplace thrives on free and open trade around the world.”
“We are concerned about some of the talk about tariffs and trade restrictions,” he said.
Such concern is reflected in the fact that hundreds of this week’s orders and commitments were attributed to undisclosed customers.
It’s standard practice for mystery buyers to account for some sales: Boeing and Airbus want to make their air-show numbers look good even if all the details of every deals aren’t firmed up. But the trend was much more noticeable this year, leading one attendee to tell Reuters that Farnborough was “more of a UFO show.”
Some of Airbus’ mystery deals were said to involve Chinese customers who wanted to avoid exacerbating Beijing’s trade battle with Washington.
“The world today is governed by the tweets we receive every morning from one side of the Atlantic,” Bloomberg News quoted Airbus’ Eric Schulz as saying at an investor presentation. “So, you know that that is putting a lot of pressure within the airlines, it’s putting a lot of pressure within the governments.”
On Boeing’s side of the ledger, undisclosed Chinese customers may be hanging back in the shadows while they wait to see how trade negotiations turn out. It could take months to see how much of the Farnborough afterglow endures.
As big as this week’s air show was for Boeing, next year’s Paris Air Show could be bigger: By then, Boeing could take the wraps off plans for its New Mid-Market Airplane, also known as the NMA or the 797.
Boeing CEO Dennis Muilenburg will be one of the featured speakers at the GeekWire Summit in October. Check out the GeekWire Summit webpage for details as well as information about sponsorship and registration.