Go big or go home. That phrase could capture the essence of this year’s Paris Air Show, where Boeing and Airbus are highlighting new orders for their wide-body planes.
“I think there’s going to be a lot of wide-body action here,” said Jim McNerney, chairman and CEO of Boeing. “Boeing is competing with a very broad product line … and Airbus [has] some new products that they’re bringing to the market, trying to find a position between us at the high and the low end. It’s going to be an interesting fight.”
As McNerney talked with “Squawk Box” on CNBC, Boeing announced a $2.8 billion order from Qatar Airways for nine 787-300ER planes. It also said that it had secured a commitment from GE Capital Aviation Services, the aircraft-leasing unit run by General Electric, for 10 787-10X Dreamliners. Boeing is expected to launch the plane—the largest version of the Dreamliner—during the Paris Air Show.
Walk around the show and you hear plenty of chatter about the newest wide-body from Airbus: the A350 XWB.
The A350 made its initial flight on Friday in Toulouse, France, and is expected to make an appearance this week at the Paris Air Show. Officially, though, Airbus says it has no plans to fly the plane in Paris.
On Monday, Airbus announced an agreement to sell 20 of its large A380s to Doric Lease in Ireland. Once completed, the order will be $8 billion.
“I think the air show is going to see a lot of competitive jockeying, with both Boeing and Airbus claiming that they have the better product lineup,” said Carter Copeland, an aviation analyst with Barclays. “I think they can actually come out with both products as successful investments.”
As both Airbus and Boeing increase their production schedules for these larger planes, it becomes a question of the level of worldwide demand for these larger planes.
The demand for wide-body and smaller commercial planes is not slowing, according to Louis Chenevert, CEO of United Technologies, the parent of airplane engine maker Pratt & Whitney.
“I think we’ll see robust demand for the next 10 to 20 years,” said Chenevert, adding that the need for more advanced and fuel-efficient planes is driving large orders. “Aircraft engines are 30% more fuel-efficient than they were 15 or 20 years ago,” he said.
All of that activity is spurring an upbeat attitude in the commercial airplane market that surprises longtime observers.
“The level of optimism we see around the show is surprisingly positive,” said Copeland of Barclays. “We see a lot of demand for replacement aircraft that really bolsters the growth we’re seeing out of developed markets. That kind of adds to the emerging market growth that we typically see for airplanes.”
—Follow Phil LeBeau on Twitter @LeBeauCarNews