Qatar Airways kicks off Paris air show with Boeing order

LE BOURGET, France Mon Jun 20, 2011 9:37pm IST

A man looks at a scale model of a Boeing aircraft at their booth at the Singapore Air Show in this February 19, 2008 file photo. Gulf carrier Qatar Airways placed an order for six Boeing 777-300ER wide-body jets worth $1.7 billion at list prices. REUTERS/Vivek Prakash/Files

A man looks at a scale model of a Boeing aircraft at their booth at the Singapore Air Show in this February 19, 2008 file photo. Gulf carrier Qatar Airways placed an order for six Boeing 777-300ER wide-body jets worth $1.7 billion at list prices.

Credit: Reuters/Vivek Prakash/Files

LE BOURGET, France (Reuters) - Airbus and Boeing were set to announce several billion dollars' worth of plane orders on Monday as industry heavyweight Qatar Airways leaped in to kickstart a rain-sodden opening to the Paris Air Show.

The Gulf carrier placed an order for six Boeing 777-300ER wide-body jets worth $1.7 billion at list prices, a day after Airbus unveiled plans to boost the range of the future competing A350, of which Qatar is the biggest customer.

The deal was expected to be the highlight of day one of the world's biggest aviation event as Airbus keeps its powder dry on major deals it hopes to announce later in the week, some of which hang on tough last-minute negotiations.

Airbus was, however, expected to report an order on Monday for 30 A320neo planes worth some $2.4 billion at list prices to Scandinavian airline SAS.

The European planemaker has targeted an order surge worth tens of billions of dollars, but was left reeling on the eve of the air show by a series of mishaps including a taxiway collision involving an A380 superjumbo.

The right-hand wing-tip of a test plane for the world's largest jetliner, with a wingspan of almost 80 meters, scraped a building at Le Bourget airport on Sunday and was withdrawn from the air show's traditional flying displays.

The aircraft was hidden out of sight on Monday as President Nicolas Sarkozy inaugurated the biennial event.

Engineers are assessing how the torn off wingtip can be repaired to allow the A380 to fly back to its Toulouse base.

The A380 collision caused dismay hours after the arrival of its new rival -- Boeing's elongated 747-8 superjumbo, which is showing its distinctive silhouette abroad for the first time.

The latest version of the legendary 747 jumbo touched down in orange and red "sunrise" livery symbolising the importance of Asia, whose economic growth is set to dominate aviation in coming years starting with this week's air show.

Industry sources expect some sales of both the A380 and 747-8 during the June 20-26 event but the main joust for market share concerns narrow-body, medium-haul 150-seat planes.

The air show could bring two record deals on successive days as Airbus tries to woo buyers for a revamped A320neo with more efficient engines, saving airlines 15 percent in fuel costs.

"We clearly believe in the business case and the orders you are going to see at the show are going to be astounding," said David Hess, chief executive of engine maker Pratt & Whitney.

A $16 billion provisional deal from IndiGo to buy 180 A320neo passenger jets, first announced in January, was mired in further negotiations that could spill beyond the air show.

The deal if finalised would set a record for the number of planes in one transaction. But sources say if all goes to plan it is set to be eclipsed by a 200-plane order being fine-tuned between Airbus and Malaysia's AirAsia.

The AirAsia deal is expected to mark a comeback by engine maker CFM after it trailed behind Pratt & Whitney in contests to power the A320neo. CFM will also power the 30 SAS A320neos.

"CFM have been getting their clock cleaned by Pratt. They have a large installed base and can rewrite maintenance and repair deals to promote new business," said aerospace analyst Scott Hamilton of Leeham News.

ASIAN DEMAND

Demand for aircraft is on a sharp rebound driven by demand from Asia's rapidly growing airports and the Middle East.

"Those two markets will enjoy at least one third if not more of the demand increase for global air traffic in the next decade," said Philip Toy, a managing director at Alix Partners.

The Airbus A320neo has also benefited from airline concerns about fuel costs. Boeing said on Sunday it would decide by end-year whether to upgrade its 737 with new engines from about 2016, as Airbus has done, or build an all-new jet in 2019.

"They will sell hundreds but it is hard to tell what is gross and what is net, what is a conversion from an earlier order. There are myriad complications," said Teal Group analyst Richard Aboulafia of the A320neo.

Orders are likely to include a confirmation of an $8 billion 100-plane order from leasing giant ILFC and another plane order for both Airbus and Boeing planes another big lessor, GECAS.

Russia and China will flex their muscles as potential rivals to Airbus and Boeing, especially during a Tuesday visit by Russian Prime Minister Vladimir Putin and some analysts expect surprise sales. But Western planemakers say it will be some time before newcomers mount a serious challenge in civil aerospace.

(Additional reporting by Joanna Partridge, Karen Jacobs, Kyle Peterson, Rhys Jones, Victoria Bryan, Lionel Laurent)

(Editing by James Regan)

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