Emirates cancels order for 70 Airbus planes

Emirates airline delivered a huge blow to European aerospace group Airbus on Wednesday, cancelling an order for 70 new-generation A350 airliners -- a deal that analysts estimate to be worth about a tenth of the aircraft maker's 2014 orders.

The long-distance aircraft, due to go into service this year, is the Airbus flagship project of the moment to compete with the Boeing 787 which has been flying since 2011.

The size of the cancellation is the biggest-ever by a prestigious customer for a civil airliner.

Airbus said that the cancellation followed an order placed by Emirates at the Dubai air show in November for an extra 50 A380 superjumbo planes.

The cancellation decision was made following "on-going discussions with the airline in light of their fleet requirement review", Airbus said.

The deal was said to be worth US$16.5 billion (12 billion euros) when it was announced in 2007, but Airbus said that customers were already interested in taking up the cancelled aircraft.

The sudden announcement by Emirates, a powerful player in the expanding Gulf airline industry, sent Airbus Group shares down 5.5 per cent to 11.22 euros.

And in London, aero-engine maker Rolls-Royce warned that the decision would cut the value of its order book by 2.6 billion pounds (3.2 billion euros, US$4.3 billion).

The cancellation "amounts to eleven per cent of orders which Airbus expects to take in 2014," said analyst Christophe Menard at brokers KeplerChevreux.

The airliner business accounts for the main part of activities by Airbus Group, formerly EADS, and the head of its sales division John Leahy said: "It's not good news commercially but it has no impact financially."

Opening an innovation show by Airbus at its headquarters in Toulouse, Leahy, who has played a major role in the rise of Airbus over the years, said that he had time to find other customers for the cancelled planes which were due to be delivered from 2019.

He had only just heard of the cancellation, he said, so the decision was not a direct counter-balance to the order placed in Dubai.

"I am amazed that we already have enquiries, there is already a queue of people," he said.

In Dubai, Emirates also ordered 150 Boeing very-long-haul 777-8 and 777-9 airliners which are due to enter service from 2020. It also took an option on another 50 of this version.

Emirates was not available for comment on Wednesday.

Airlines had been making massive aircraft orders in anticipation of a pick-up in air traffic as advanced economies recover from a slump and with emerging economies expected to deliver a boost in demand.

The future Boeing 777 series and the Airbus A350 are competitors in what is known as the medium, twin-engined segment, the heart of the market, said analyst Scott Hamilton at Boeing's home base in Seattle in Washington State.

The decision affects nearly 10 per cent of the orders for the new Airbus long-haul aircraft which is going through the processes for obtain airworthiness certification.

Airbus added that it was still very confident in the A350 programme and said that it had orders from 28 airlines for 742 aircraft six months ahead of the plane entering service.

A notable feature of the plane is that the fuselage is made mainly of composite materials.

"The programme of test flights for the A350 is progressing well and is on schedule for certification (by the Aviation Authorities) in the coming months," said Airbus.

Emirates had ordered 50 A350-900 and 20 stretched A350-1000 aircraft in 2007, marking the second-biggest order by volume for the A350 plane after 80 ordered by Qatar Airways.

Singapore Airlines has also ordered 70 A350 planes.

Scott Hamilton said that the cancellation could leave a gap in the Emirates fleet which would give Boeing an opportunity to sell its 777-300R model which is available for delivery from 2017.

Emirates could decide to increase substantially its fleet of these Boeing planes rather than take up a new model.

Menard said that in all probability, Emirates had decided to streamline its fleet and focus on the Airbus A380 and the Boeing 777 series.

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Airbus reports profit leap, shares jump

Airbus Group, formerly EADS, reported on Tuesday a near doubling of quarterly net profit, a rise in sales driven by helicopters, but a fall in new orders after an exceptional performance last year.

Net profit for the quarter rose by 93.0 per cent to 439 million euros (US$604.5 million).

The price of shares in the group rose by 4.91 per cent to 51.92 euros in early trading in Paris. The overall French market as measured by the CAC 40 index was up 0.20 per cent.

The value of orders taken fell by more than half to 21.1 billion euros from 49.5 billion euros.

This reflected orders taken for 103 aircraft on a net basis, after allowing for cancellations.

That was far short of the figure of 410 in the first quarter of 2013 which was an exceptional year for aircraft manufacturers, notably Airbus and its main US rival Boeing, as airlines rushed to renew their fleets after the financial crisis and in readiness for a forecast boom in air travel, mainly in emerging economies led by countries in Asia.

Airbus has already said that it will not be able to match the 2013 figures for orders taken.

However, Airbus Group held to its forecast that orders taken this year would exceed the number of aircraft delivered, and that its operating margin would be 7.0-8.0 per cent in 2015.

In the first three months of the year the group achieved an operating margin of 5.5 per cent.

Sales revenue by the group, which builds mainly Airbus airliners but also has wide interests in the aerospace sector from making helicopters to satellite equipment, fell by 5.0 per cent in the quarter from the equivalent figure last year to 12.6 billion euros.

Meanwhile, Airbus Helicopters, formerly Eurocopter, increased its number of orders taken by half.

Airbus Helicopters also increased the number of aircraft delivered to 74 from 58, and so raised sales by 14.0 per cent.

The Airbus Defence and Space division, grouping the two activities formerly known as Astrium and Cassidian, held new orders at about the previous level.

The group said that the overall performance meant that earnings per share had doubled from 28 euro cents to 56 cents.

Chief executive Tom Enders said that the group was holding to its forecasts but still had much to do by the end of the year, with the emphasis being on applying restructuring programmes.

The company is due to put its new A350 airliner into service by the end of the year. This aircraft is a long-haul plane with a fuselage made of composite materials.

The group changed its name to Airbus Group at the beginning of this year in a major refocusing of activities after a failed attempt to merger with British group BAE Systems.

It is now restructuring its defence and space activities to face increased international competition at a time of cuts in defence budgets by governments in the West.

At stock brokers Aurel BG in Paris, analysts said that Airbus had published solid results with sales exceeding expectations. They noted that the group had fallen behind Boeing in recent months but remained confident.

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Rolls-Royce unveils future plane engine designs

Rolls-Royce unveiled on Wednesday its next generation of fuel-efficient plane engines to power civilian aircraft of the future.

Two weeks after announcing a shock profit warning with government cutbacks on defence spending impacting its military engines business, Rolls revealed plans to build on its successful Trent XWB engine used to power Airbus A350 passenger planes.

"These new designs are the result of implementing our ongoing technology programmes," said Colin Smith, Rolls-Royce Director, Engineering and Technology.

"They are designed to deliver... even better fuel efficiency, reliability and environmental performance," he said in a statement delivered alongside a media presentation event in Derby, central England, where the Trent XWB is assembled.

Rolls said that Advance, the development name for one of its future engines, will burn at least 20 percent less fuel and CO2 emissions compared with the first generation of Trent engines that entered service in 1995. The Advance could be ready by the end of the decade, it added.

An even more fuel-efficient model, UltraFan, could be ready for service from 2025.

"Both engine designs are the result of the ongoing research and development investment, of approximately 1.0 billion pounds (US$1.7 billion, 1.2 billion euros) a year, which Rolls-Royce makes across its aerospace and non-aerospace businesses," the company added.

Rolls is the sole engine provider for the Airbus A350 XWB, a long-range, wide-body plane which is slated to come into service at the end of the year.

European plane maker Airbus Group announced on Wednesday a 22 percent year-on-year rise in net profit for 2013, despite one-off charges related to its new A350 wide-body aircraft.

Earlier this month, Rolls said that its profit and revenue would flatten in 2014, as government cutbacks on defence spending ends the company's decade of rampant growth.

News also of a 41-percent slump in annual profits had sent Rolls-Royce shares diving earlier in February.

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Airbus Group sees profits jump in 2013

European aerospace giant Airbus Group on Wednesday announced a 22 percent year-on-year rise in net profit for 2013, despite one-off charges related to its new A350 wide-body aircraft.

Net profit was 1.5 billion euros ($2.06 billion) while earnings before interest, tax, depreciation and amortisation (EBIT) rose by 21 percent to 3.6 billion euros, it said in a statement.

Full-year revenue was up five percent to 59.3 billion euros, driven by increased aircraft deliveries.

For 2014 the group -- formerly known as EADS -- said it "expects moderate return on sales growth" and "confirms its 2015 return on sales target of 7-8 percent".

The final quarter of 2013 included a 434-million-euro charge "to reflect the higher level of costs on the A350 XWB programme", it said. The A350 XWB is a long-range, wide-body plane which is slated to come into service at the end of the year.

Airbus Group added that it planned to increase production of its popular A320 single-aisle planes from 42 to 46 per month from the second quarter of 2016.

Last month Airbus announced that it took a record 1,503 net orders in 2013, beating US rival Boeing which had 1,355 orders. But it trailed behind Boeing in terms of finished airliners delivered.

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Boeing dominates Airbus with US$101.5b orders at Dubai show

US aerospace giant Boeing on Wednesday announced up to US$101.5 billion in aircraft orders at the Dubai Air Show, as its new 777X model propelled total demand to more than twice that booked by European rival Airbus.

More than US$95 billion of the Boeing orders were for the 777X long-haul aircraft, making it the "largest product launch in commercial jetliner history by value", said the firm.

European giant Airbus meanwhile totted up orders worth US$44 billion, with Emirates placing the biggest by value worth US$20 billion for 50 A380s.

The total takings of about US$145 billion by the two rivals at Dubai were about twice those recorded at the Paris Air Show in June, when Airbus announced US$39.3 billion in orders and Boeing unveiled US$38 billion for a total of about US$77.0 billion.

Boeing's performance in Dubai was underpinned by demand for its new 777X, which was snapped up by Middle Eastern airlines.

Dubai's flagship Emirates placed an order worth US$55.6 billion for 115 777-9X aircraft designed to carry more than 400 passengers. It also ordered 35 777-8Xs, which has a capacity of 350 passengers.

Etihad Airways ordered 17 of the bigger model and eight of the smaller 777-8X, while Qatar Airways bought 50 777-9Xs worth US$18.9 billion.

Boeing claims that the aircraft, which is to enter service around 2020, would be 12 per cent more fuel efficient than the Airbus A350.

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Boeing, Airbus clinch mega orders at Dubai

Dubai Airshow took off on Sunday with huge aircraft orders and commitments worth around $141.5 billion for Boeing and Airbus from Gulf carriers, with the US manufacturer well in the lead.

The biennial show began brightly for Boeing's 777X, a long-range wide-bodied airliner featuring lower fuel consumption and composite wings.

The new 777 is scheduled to be operational in 2020.

Etihad Airways began the show with an $18.2-billion order for Boeings including 25 777Xs and one 777-200 freighter, Boeing said.

The deal also included an order for 30 787 Dreamliners, making the fast-growing carrier the largest single customer for the medium-body plane.

The Abu Dhabi carrier also announced it was taking an option to buy another 26 aircraft from Boeing.

The total value of the order, including engines and options, amounts to $25.2 billion, according to Etihad.

Emirates Airline followed shortly afterwards by placing orders with both the rival US and European manufacturers, in twin deals valued at $99 billion.

Of this sum, 80 per cent is destined for Boeing's coffers if commitments are confirmed.

The Dubai-based airline ordered 150 777Xs -- 35 777-8Xs and 115 of the 777-9X variant.

Boeing said the Emirates orders were commitments worth $55.6 billion.

The Middle East's largest carrier also boosted the Airbus sales sheet with a firm order for 50 A380 superjumbos worth $20 billion at book value, in the double-decker's first sale this year.

The order cements the status of Emirates as the single largest operator of the long-haul airliner, its chief Sheikh Ahmed bin Saeed Al-Maktoum said.

"Emirates has understood from the start the A380's advantages in terms of efficiency, economics and passenger comfort," Fabrice Bregier, Airbus chief and president, told the signing ceremony.

Airbus has been struggling to sell its A380 superjumbo.

Sales of the world's largest commercial aircraft suffered in 2012 after hairline cracks were discovered on A380 wings. Just nine were sold last year, down from an initial order of 30.

Airbus also clinched a $19-billion deal with Etihad, which ordered 87 aircraft including 50 extra-wide-body A350 XWBs.

The order comprises 40 long-haul A350-900s, 10 A350-1000s, one A330-200 freighter, in addition to 26 A321neo and 10 A320neo single-aisle planes, in addition to an option for 30 more aircraft.

Emirates budget sister company also made a commitment to buy up to 100 Boeing single-aisled 737 MAX and 11 Next-Generation Boeing 737-800s, in a deal valued by Boeing at $8.8-billion.

Qatar Airways also chipped in by signing a letter of intent to buy 50 Boeing 777Xs worth $19 billion.

The Doha-based airline said it had also ordered five A330 freighters from Airbus, valued at about $1 billion according to list prices.

The order was accompanied by an option to add eight airliners, which would put the overall price of the deal at $2.8 billion, chief executive Akbar Al-Baker said.

The Qatar Airways chief praised Boeing's 777 long-haul workhorse as he made a surprise appearance at the joint Emirates-Boeing briefing.

The Triple Seven has been a bestseller since it was launched in the 1990s, with 1,473 sold by November 12.

Boeing is fielding the 777X to counter Airbus's long-haul A350-1000.

This aircraft is anticipated to enter service in 2017 with a passenger payload of 350, threatening Boeing's predominance in the long-haul market.

Etihad on Sunday also announced it is acquiring a 33.3 per cent stake in Swiss carrier Darwin Airline which it plans to rebrand as Etihad Regional after the deal receives regulatory approval.

At the 2007 Dubai Airshow, sales of $155 billion were announced, and analysts have projected that orders this time could nudge that record.

In June, the Paris air show at Le Bourget racked up $115 billion in announced sales at catalogue prices.

The 13th Dubai Airshow, which runs until Thursday, is being held for the first time at the just opened Al-Maktoum International, the emirate's second airport and touted to become the world's biggest when complete.

With some 150 aircraft on the tarmac and 1,000 exhibitors, the show cements the Gulf region's hard-won position as the global hub for 21st century travel, spearheaded by booming airlines whose reach encompasses the world.

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Airbus urges Berlin to unfreeze 600m euro loan payment

Airbus on Saturday urged the German government to pay out a promised final loan instalment of 600 million euros (US$830 million) for the construction of the A350, after the aircraft manufacturer said it had created German jobs in return.

Airbus chief operating officer Guenter Butschek told the German daily Tagesspiegel that the firm was offering 4,000 jobs - 250 per cent more than originally planned - in a bid to unfreeze the last loan tranche, which has been blocked for months by Berlin pending agreement on German-based manufacturing and research jobs.

"We have clearly kept our promises and are of the opinion that there is no reason to withhold the remaining amount," Butschek was quoted as saying. "The ball is now in the government's court."

But he added that Airbus, a subsidiary of France-based EADS, was capable of completing the A350 development programme even without the outstanding loan amount.

"We have proved with our first flight, and with 400 flight hours since then, that we can finance and develop such a project according to plan, even without the rest of the government loan."

The first A350 XWB wide-bodied passenger jets are scheduled to be delivered by the end of next year. The next-generation plane carried out its first test flight in June.

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New Airbus plane takes off with big orders at Paris Air Show

The Airbus next-generation A350 plane took centre stage at the Paris Air Show on Wednesday, winning multi-billion-dollar deals ahead of a much-anticipated possible fly-over.

The news comes just days after the new plane took to the skies in its first ever test flight on Friday, stealing the limelight before the start of the air show - a key event where Airbus and Boeing compete fiercely for plane orders.

The European plane maker is currently ahead of its arch-rival at the show - US$53.2 billion in new plane orders or agreements for Airbus versus US$45.2 billion for Boeing.

Air France-KLM on Wednesday confirmed an order for 25 A350 planes - which make extensive use of lighter composite materials to reduce fuel costs - in a deal worth US$7.2 billion at catalogue prices.

"Despite the difficulties that Air France-KLM is facing, we are in significant good shape to be able to plan for the renewal of our long-haul fleet for the long term," said Alexandre de Juniac, head of the airline group.

The agreement comes with an option for a further 25 planes, and the aircraft will come into service in 2017, he told reporters. The airline group had first announced its intention to buy the planes in September 2011.

SriLankan Airlines, meanwhile, took an option to buy four of the new planes - an option expected to be exercised within two weeks - and placed six firm orders for Airbus's popular A330 aircraft in a deal worth US$2.6 billion at list prices.

The A350 took off on Wednesday on its second test flight in the southwestern French city of Toulouse, where Airbus is headquartered, and if all goes well could fly over the Paris Air Show on Friday.

The plane pushed Boeing out of the limelight on Wednesday, but the US firm had stolen the thunder on Tuesday with the launch of a long version of its next-generation Dreamliner - the 787-10.

Intended as a message that it is firmly back on track after a slew of technical problems forced the grounding of its entire Dreamliner fleet worldwide earlier this year, Boeing announced more than 100 orders for its newest plane.

On Wednesday, it said plane leasing firm CIT Aerospace had ordered 30 of its new, medium-haul 737 MAX planes in a deal worth US$3 billion at catalogue prices.

Ryanair also confirmed a huge order for 175 medium-haul 737 planes worth US$15.6 billion, and Czech private airline Travel Service announced a commitment to buy three of its 737 MAX aircraft valued at US$301.5 million.

The 737 MAX is a modernised version of Boeing's older 737 and has yet to come into service. It is part of a new generation of planes emerging onto the market which consume less fuel and enable airlines to reduce costs.

Other smaller competitors have also made a mark at the air show - the world's biggest - with ATR, a joint venture between European aerospace giant EADS and Italy's Finmeccanica, announcing big orders.

On Tuesday, Nordic Aviation Capital ordered 35 ATR-600 aircraft, with an option on 55 more in a deal worth US$2.1 billion, and the firm announced another US$482-million contract Wednesday.

Brazil's Embraer has also come up trumps with the launch of a new family of regional jets and 100 orders, with 215 other intentions to purchase the aircraft.

But the Paris air show, in its 50th edition this year, is not just about commercial battles, with the long-awaited A400M military transport plane taking to the skies as well as Russia's Su-35 fighter jet.

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Airbus to have the last laugh? Not just yet when Boeing introduced the 787-10 during the show. Ryanir's order just threw the battle right to the wire. We won't know the victor until the very last day.

Boeing launches new Dreamliner with over 100 orders

Boeing launched the biggest version of its Dreamliner plane at the Paris Air Show on Tuesday with over 100 orders worth about $30 billion and a clear message - after a run of technical blows, the US firm is back on track.

The announcement failed to steal a march on arch-rival Airbus on the second day of the show with the European plane maker soaring ahead on new plane orders or agreements worth $36 billion compared to $26.2 billion for the US firm.

Smaller regional plane makers such as European manufacturer ATR also made their presence felt with multi-billion-dollar contracts propelled by demand and opportunities in Asia and South America.

"Boeing today officially launches the 787-10," Boeing head Jim McNerney told reporters, with commitments to buy the new aircraft from United Airlines, Singapore Airlines, British Airways, and leasing firms ALC and GECAS.

Boeing did not say how much the deals for the 787-10 -- the biggest of the three fuel-efficient Dreamliner planes -- were worth, but each aircraft costs $290 million at catalogue prices.

That would mean the contracts were worth $29.6 billion, although hard negotiation in the airline industry usually results in big discounts from list prices.

ALC also said it would buy three 787-9 planes and Korean Air ordered 11 long-haul aircraft.

The announcements put Boeing firmly back in the running after a slew of recent technical problems forced the grounding of the entire Dreamliner fleet worldwide for three months in a huge blow to the US firm -- and its bosses.

"If I took off my shirt you'd see a lot of scars from the 787," Patrick Shanahan, general manager of airplane programmes, said recently in Seattle where Boeing factories are based.

Ray Conner, head of Boeing's commercial airplanes division, told reporters earlier this week that executives at the firm were "battle-tested" after the experience.

In just over four years, Boeing should have all three versions of the Dreamliner on the market and possibly two newer versions of the 777, against just three types of A350, Airbus's direct competitor.

Undeterred, the European plane maker got off to a roaring start at the air show -- though most of its orders so far arise from the medium-haul market, which it already dominates.

Low-cost airline easyJet on Tuesday announced a deal to buy 135 of the Airbus A320 passenger planes -- one of the firm's most popular and profitable models -- including 100 of new generation and more fuel-efficient neo aircraft.

And Syphax Airlines, a new carrier based in Tunisia, signed an agreement to buy three of Airbus's new A320neo planes and three of its classic A320 aircraft.

But the European firm is seeking to unseat Boeing in the more lucrative long-haul segment with its own next-generation A350 plane, which flew for the first time on Friday ahead of the show, where it could make a brief fly-by.

The aircraft -- which like the Dreamliner makes extensive use of lighter, carbon-based composite materials that reduce fuel consumption -- will seek to compete with the 787 as well as Boeing's older 777 model.

So far, though, there have been no new orders for the A350 at the air show.

Overall, if catalogue prices are used as a barometer and only firm new orders and agreements counted, Airbus has taken the lead with orders worth $36 billion so far, compared to $26.2 billion for Boeing.

Other smaller competitors in regional transport markets have also made a mark, with ATR -- a joint venture between European aerospace giant EADS and Italy's Finmeccanica -- announcing one of its biggest orders.

Leasing firm Nordic Aviation Capital (NAC) signed up for 35 ATR-600 aircraft built by the firm, with an option on 55 in a deal worth $2.1 billion, ATR said.

Brazil's Embraer has also come up trumps with the launch of a new family of regional jets and 100 orders, with 215 other intentions to purchase the aircraft.

ATR said there were numerous opportunities in emerging markets in Asia and South America, adding that 30 percent of passengers worldwide travel on distances inferior to 550 kilometres (342 miles), which regional planes cover.

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The Paris Air Show is piling on the orders flick and fast on all plane manufacturers, from small boys like Embraer to bigger ones like Airbus and Boeing. There is still a long way to go before the show ends, and it is still unsure which one of the two biggest plane makers will be the ultimate winner. The key shall lay in the hands of the A350 and B787.

Boeing-Airbus dogfight dominates top airshow

The world's biggest air show takes to the skies on Monday, with a battle between Boeing and Airbus for orders in the lucrative market for wide-body planes set to dominate the Paris event.

European manufacturer Airbus managed to steal a march on its American rival before the show -- at Le Bourget just north of Paris -- with a successful maiden flight of its new A350 long-haul plane.

Airbus is pinning its hopes on the fuel-efficient A350 to compete in the long-haul sector after gradually winning more than half of the market for medium-haul, single-aisle planes that carry an average of 150 passengers.

The A350 is expected to conduct a fly-by of the air show towards the end of the week, hoping to woo potential customers.

During the show, famous for high-profile announcements of big-money deals, Airbus hopes to add a slew of orders for the plane -- set for delivery at the end of 2014 -- to confirmed contracts with Qatar Airways, British Airways and Hong Kong's Cathay Pacific.

Nevertheless, Boeing is also entering the show in bullish mood as it seeks to move on from its difficulties with the trouble-prone 787 Dreamliner.

Technical problems with overheating batteries forced the worldwide grounding of the Dreamliner fleet in a major setback for the Seattle-based manufacturer.

Boeing will showcase the Dreamliner at the event and the firm is expected to announce the launch of its 787-10X, a longer version of the original Dreamliner, which can accommodate up to 330 passengers.

The US firm is also set to announce in the coming months an up-to-date version of its existing 777, with wings made of fuel-saving composite material like the Dreamliner.

Boeing boss Ray Conner said it was going to be a "great competition" and said that airlines would "benefit from the fact that both companies are going to have a good wide-body product line."

"I think we have the better products and at the end of the day, hopefully the better product wins," Conner told reporters on Sunday.

Airbus has positioned the A350 for the market between the popular 777 and the 787, hoping to steal share away from both planes.

The European firm argues that its craft will consume six percent less fuel than the 787 and a quarter less than the 777.

Boeing's strategy, on the other hand, is to offer its clients a wider choice of long-haul airliners but Tom Enders, boss of Airbus parent company EADS, said "the jury was still out" in terms of the firms' respective market situation.

"It's premature to draw any conclusion and it's not necessarily the one who has more products who is also better positioned on the market," said Enders.

And analysts warned that Boeing's recent technical troubles may yet haunt the US firm.

"Airbus can, and will, argue that Boeing's ability to execute is questionable and that the A350 is a better bet in terms of timing and availability," said Richard Aboulafia, a US-based aviation expert.

Another expert, Christophe Menard, from Kepler Capital Markets in Paris, also noted that Airbus had developed the A350 faster than the Dreamliner which suffered three years of delays before finally taking off.

At last year's Farnborough show in Britain, Boeing came out on top, securing orders worth around $35.5 billion, more than double the Airbus haul of $16.9 billion.

However, while the big two still dominate the shows, other players are entering the market, with Canada's Bombardier hoping to win orders in the medium-haul segment with its CSeries, a plane with 110 to 130 seats.

"The duopoly is definitely over," acknowledged Randy Tinseth, marketing vice-president at Boeing.

The Paris air show, in its 50th edition this year, is not just about commercial battles and the long-awaited A400M military transport plane will also likely provide a highlight as it takes to the skies.

The market in unmanned surveillance drones will also be in focus after three top European defence companies urged the creation of a European programme to manufacture the craft, currently available only from Israel or the United States.

The Paris Air Show runs from June 17 to 23. It is expected to welcome some 350,000 visitors through its cavernous show halls.

The event, which has become the global aviation industry's largest in terms of surface and number of exhibitors, will throw open its doors to the public on June 21 after first welcoming professionals.

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 The battle is sure to heat up now that Airbus has successfully tested the A350 on its maiden flight without any issues at hand. It was the Dreamliner's show in 2012 but I reckon it will be the A350's turn this year. Its numbers and fuel efficiency sure looks very attractive.

Singapore Airlines places US$17b order for Airbus, Boeing aircraft

Singapore Airlines (SIA) announced on Thursday it will buy 30 Airbus and 30 Boeing aircraft in an order worth more than US$17 billion as it seeks to maintain market leadership using the next-generation fuel-efficient planes.

"Singapore Airlines has agreed to order 30 more Airbus A350-900s and 30 Boeing 787-10Xs in deals valued at more than US$17 billion," the airline said in a statement.

For Airbus, the deal includes an option to purchase 20 more planes in addition to the 30 firm orders. The options can be converted to firm orders for bigger A350-1000s, it said.

SIA said the latest Airbus order is SIA's third for the A350-900s and will raise to 70 the number of firm orders in place for the aircraft type.

The agreement with Boeing comprises 30 firm orders and is conditional upon the US aircraft maker formally launching the B787-10X programme.

"Today's aircraft orders are among the biggest in Singapore Airlines' history, helping to ensure that we retain our industry leading position," said chief executive Goh Choon Phong.

"They demonstrate our commitment to the Singapore hub and our confidence in the future for premium full-service travel."

SIA is battling strong competition in the premium segment from Middle Eastern carriers and on the economy side from budget airlines, which have grown in number in the region.

Like other airlines its net profit has also been hurt by the global economic slowdown, which has hit both passenger and cargo demand, as well as high oil prices.

The fresh orders "underscore SIA's response to the Gulf carriers' aggressive approach", said Shukor Yusof, an aviation analyst with Standard and Poor's Equity Research.

"This is perhaps to show that the airline still has the capacity and certainly the deep pockets to mount a challenge for the future," he told AFP.

"SIA has almost no debt. It has cash of over US$3.0 billion, so the war chest is huge and it's one of the most well-managed airlines in the world."

The orders are also a "resounding vote of confidence for the Airbus A350-900, especially coming from an airline that is widely considered the benchmark in the market", Shukor said.

"I think it also assures SIA's commitment of retaining its reputation as market leader in the premium sector as well as its ability to shape the future landscape of next-generation fuel-efficient aircraft," he added.

The A350-900 model is due for its first take-off this summer, with the first deliveries to airlines scheduled at the end of 2014.

Airbus hopes the 314-seater will compete with Boeing's 787 Dreamliner by being both lighter and more fuel-efficient than previous models.

The Boeing 787-10X has still to be launched, with Shukor saying the US firm could announce the launch date at the Paris Air Show in June.

An SIA spokesman could not confirm if the airline is the first to order the Boeing 787-10X.

The Airbus firm orders will be delivered from the 2016/2017 financial year and the Boeing planes from the 2018/2019 fiscal year, SIA said in its statement.

Rolls-Royce's Trent XWB is the sole engine type for the A350-900, while an engine selection for the B787-10Xs will be made later.

SIA said it would use the Airbus planes for its medium and long-range routes and the Boeings for medium-range services.

"Between the two orders, Airbus will be uncorking the champagne earlier than Boeing," Shukor said, noting that Boeing's model is still on the drawing board.

SIA shares fell 0.46 percent to S$10.84 on Thursday before the deals were announced.

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Finally some positive news from the airline? This is the biggest plane order in the airline's history, and they showed they are not lying there waiting to be trampled all over. All these long range fuel saving planes will make the airline more lean, and mean. Seems that they are scaling down on the A380 and also boosting its SilkAir network. Smaller planes will be much easier to fill and are more efficient. These slew of new planes will make the future more exciting.

Leasing company ALC places US$9b order with Airbus

US group Air Leasing Corporation (ALC) has placed a giant order for airliners built by European manufacturer Airbus worth about US$9.0 billion (6.64 billion euros) at catalogue prices, Airbus said on Monday.

The order is for 20 A350-900 aircraft, five A350-1000, and also converts an option for 14 fuel-efficient A321neo aircraft into an order, Airbus said in a statement.

The chief executive of ALC Steven Udvar-Hazy said in a statement that the A350 XWB (Xtra wide body) airliner "is becoming the industry benchmark for efficiency in the long haul segment, and the A320neo family is ideal for airlines operating short to medium-haul missions."

He said: "These aircraft will help airlines grow their businesses while simultaneously reducing their operating costs and emissions."

He added that his company aimed to offer its customers "the most modern, efficient aircraft on the market, and both the A350 XWB and the NEO fit right in that category."

The A350 is due to enter service in the second half of 2014.

The aircraft is intended to compete with the Boeing 777 aircraft made by the US Boeing Corporation and with the Boeing Dreamliner 787.

Airbus hopes that the new aircraft will enable it to end Boeing's dominance of the market for long-range airliners.

The A350 XWB family of aircraft is made mainly of composite materials based on carbon.

It is being offered in three version capable of carrying 270-350 passengers.

The first version to be put into service will be the A350-900 with 314 seats.

It will be followed in 2016 by the A350-800 with 270 seats and in 2017 by the A350-1000 with 350 seats.

Airbus said that ALC had also taken an option on an extra five A350-1000 aircraft.

The Airbus statement said that the A320neo series of aircraft, due to enter in service in 2015, would deliver "up to 15 percent in fuel savings which is equivalent to 1.4 million litres of fuel - the consumption of 1,000 mid-size cars, saving 3,600 tons of CO2 per aircraft per year."

The manufacturer said that the A320 family of aircraft, with more than 9,000 aircraft ordered and more than 5,400 aircraft delivered to more than 380 customers, was the world's "best-selling single-aisle aircraft family".

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Aircraft leasing business, a good way to earn money? Anyway, it's good news for Airbus to receive such a big order for their future planes which are targeting at ending the dominance of Boeing in the long-range market. But a lot remains to be seen for the A350.

Airbus confident of avoiding Boeing battery issue

AIRBUS said it was confident its planes would not encounter the same technical problems afflicting archrival Boeing's 787s, even though they use the same kind of batteries that have this week raised security concerns.

The company may nevertheless be affected eventually, experts say. If investigations show that authorities had approved parts for the 787 that turned out to be deficient, Airbus may face tougher tests when it tries to launch a new plane this year.

Boeing Co.'s 787s have been grounded by governments around the world, including in the US and Europe, because of fears the airplane's lithium ion battery system was unsafe. The batteries in some cases swelled and leaked, creating a fire hazard under the cockpit, where they are stored.

Airbus's new A350 wide-body jet, a rival to the 787 that will make its first flight around the middle of the year, also uses lithium ion batteries, but in a different setup. That means it is unlikely to face the same problems as the 787, Airbus said.

"We are confident our design is robust" and "don't see any reason to change," Airbus Chief Executive Fabrice Bregier said, after announcing that deliveries in 2012 reached a record high. Despite the rise, the deliveries were still less than Boeing's, making the Chicago-headquartered company the world's largest plane maker.

Bregier noted the A350 requires only half the battery power of a plane like the 787, which is the first commercial aircraft to make extensive use of batteries to drive its electrical systems and be fuel-efficient.

"There are some architectural differences and the suppliers are different," Bregier said. "As Boeing said, the battery is not the issue, it's the way you integrate it to the power system."

Airbus has had its own share of technical problems that have delayed the rollout of a key military aircraft, costing billions in extra costs, as well as security issues concerning the wing ribs of its superjumbo A380 jets.

Bregier and his fellow officials at Airbus avoided any smug remarks over their rival's current troubles.

"It's not our place to give Boeing lessons, we've had our own problems in the past," Bregier said. "I honestly wish all the best to my colleagues at Boeing to put this aircraft back in flight. I don't bet on the difficulties of a competitor in order to build Airbus' success."

Industry experts warned against assuming that Boeing's troubles could help Airbus, even though shares in its parent company, EADS NV, have been rising this week as Boeing's have been falling.

That's not just because airlines are unlikely to cancel orders en masse without yet knowing the cause of the error, but also because an investigation in what caused Boeing's battery problems may throw up new regulatory hurdles for Airbus.

Sandy Morris, an aerospace analyst with Jefferies in London, noted that the 787 had been flight tested for thousands of hours. That it reveals problems now may lead authorities to conclude that the certification process had not been tough enough.

"If the authorities get more stringent and take more time to certify planes, the first to be affected is going to be Airbus, which happens to be the next major company launching a plane, (the A350)," Morris said.

Airbus expects the A350's inaugural flight to be just before or after the Paris air show in June.

Despite the problems that Airbus has faced and a weak global economy, the company booked a record 588 deliveries in 2012 while taking in 914 new orders for jets. For 2013, it plans to increase production to deliver more than 600 aircraft and expects orders for at least 700 jets.

The results were not enough to match Boeing, which for all its current troubles, regained the crown of biggest airplane manufacturer in 2012. The company delivered 601 last year, the most since 1999.

The two companies have been competing neck and neck for years, rushing to roll out new models that might appeal most to global airlines.

Among commercial planes, Boeing bet big on the 787, dubbed the Dreamliner, and its appeal as a high-tech and fuel efficient model. At a time of high oil prices, that was a big selling point with airlines, many of which were trying to cut costs. Airbus is focusing instead on size - the new A380 is a double-decker that seats 525 people and is so large some airports have to be adjusted to accommodate it.

The two companies are also challenging each other in legal arenas. They are locked in an international trade dispute with the World Trade Organization in Geneva, each claiming that the other receives illegal state subsidies.

Airbus' fortunes have been mixed in recent years. Until 2012 it was selling more planes than Boeing but it has also run into more technical problems, notably with the A380. It sold only nine of those superjumbos last year.

Looking ahead, chief salesman John Leahy pledged he'd get at least 25 orders for the massive A380 jets this year and expects to deliver 25. Airbus sold only nine and delivered 30 last year.

Bregier said the cause of the technical problems affecting the A380 had been found and a solution was being put in place for the nine airlines currently flying the giant aircraft.

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They might be using the same battery but the setup is different and the A350 only uses half the battery power needed by the B787. However, if investigations on the B787 is found to be not stringent enough on tests, A350 might be affected and take even longer to enter service.

Boeing may take year to decide on mini-jumbo revamp

(Reuters) - Boeing Co appears to be at least a year away from offering a new version of the 777, its most profitable jet, timing that would be later than some airline customers want and could push them into the arms of rival Airbus.

Carriers such as Dubai's Emirates Airline EMIRA.UL and British Airways (ICAG.L) had planned on the new mini-jumbo, provisionally called the 777X, entering service by the end of the current decade. That being the case, the industry widely expected Boeing to begin selling the new jet by the end of this year.

With just seven weeks left in 2012, that timetable now appears increasingly unlikely, based on internal conversations between the planemaker and its customers.

"It's going to be way further off than people think," said a person familiar with the discussions who declined to be identified because the person was not authorized to speak publicly about the matter.

"Boeing is in conversations about it," the person added. "But the launch date (for sales) is a year away at least."

The 777X is aimed at the market for long-haul jets, worth hundreds of billions of dollars for Boeing and Airbus over the next decade or so. But some think delay by Boeing in creating the new 777 could push airlines into buying Airbus' rival A350-1000 jet, due to enter service in 2017.

Emirates, British Airways, Cathay Pacific Airways (0293.HK) and United Airlines (UAL.N), big buyers of the 777, have been pressing for the 777X to come sooner rather than later. The 777 is one of the most successful jets of all time and airlines are eager for an amped-up version that can go farther on less fuel with more passengers.

Rather than wait, United started talks with Airbus about upgrading some of its 25 orders for the A350-900 to the A350-1000, industry sources said. Cathay Pacific chose the A350-1000 in July. Analysts say others may grow impatient and follow.

In contrast, the 777X may not enter service until 2021 or 2022, rather than the end of the decade, based on Boeing's recent statements, said Richard Aboulafia, an analyst at the Teal Group in Fairfax, Virginia.

He was referring to comments by Boeing Chief Executive Jim McNerney on a conference call with analysts on October 24 in which he said, "We are looking at the end of the decade, beginning of the next decade" for entry into service.

"When you start throwing around 'early next decade' you're sending a message to customers to either buy our existing jets or go see Airbus," Aboulafia said. "You do not want to send that message."

A spokeswoman for Boeing said it hasn't changed the timing but declined to say if it will begin selling the first 777X by the end of the year.

"While we haven't set a firm timeline or launched the program, we've consistently talked about a potential market entry around the end of the decade and we are engaging with our customers to define the airplane and its ultimate timing," said Karen Crabtree, head of product strategy communications for Boeing. Boeing also said it always aims to balance spending between investment and shareholders.

STRATEGIC SHIFT?

Some analysts say the vague 777X timetable is fresh evidence of a bigger shift: a new reluctance by Boeing to plow capital into ambitious plane-development programs and an intention to instead return it to shareholders through higher dividends and share buybacks. Just five months ago, Boeing was seen by many as restoring an "engineering culture" that gave priority to new planes and production over immediate shareholder gains.

Also, linking "Boeing" and "delay" on the 777 serves as a painful reminder that the 787 Dreamliner, the world's first commercial carbon-fiber plane, arrived three and a half years behind schedule.

To be sure, Boeing and Airbus always do a delicate dance when launching new jets. Launch too early and they give their rival a chance to create a more technologically advanced jet. Launch too late and their rival has too much time to rack up sales, stealing the market.

In this case, the 777 delay frees up cash for other Boeing projects, such as the new 737MAX, aimed at the shorter-range market. It also avoids disrupting sales of the current 777 model, which is very popular.

And since timing and design of the 777X are must-win decisions, some say Boeing is wise to take time and get it right - even if that upsets some customers.

"We've all seen Boeing move quickly when they need to," said a person at a big Boeing customer who spoke on condition of anonymity. "If the industry is still asking this question (about timing) this time next year, then we may have some issues."

Last spring, the industry widely understood Boeing would seek board approval to begin selling the 777X by the end of the year or early 2013. That would mean work on building the jets could start in 2014, allowing the jet to enter service, or begin carrying commercial passengers, around 2019.

But the June resignation of Boeing's commercial airplane chief, Jim Albaugh - credited with solving many 787 production problems - and the ticking clock have raised concerns. Some analysts say Boeing is already at risk of waiting too long and losing its advantage in timing.

EYE ON AIRBUS

For its part, Boeing is keeping a wary eye on sales of the A350-1000, according to industry sources, and stands ready to pounce quickly if Airbus receives a surge in orders for its 350-seat rival model.

But if sales of the rival continue at a relatively sedate pace, Boeing will want to avoid moving too quickly and disrupting sales of its current-generation 777-300ER, while trying to catch the replacement cycle of 747-400s due to retire around the end of the decade, industry sources said.

Additionally, Boeing wants to be certain, before settling on the performance and economics of its 777X, that Airbus plans no further design tweaks to the A350-1000 to boost sales. Airbus has said it is happy with the design and there will be no further redesigns.

The A350-1000, the biggest member of the A350 family, is an all-new carbon composite design boasting fuel savings over the 777-300ER.

Boeing has limited margin for error. It also is juggling other complex programs such as the 787 and the stretched-jumbo Boeing 747-8. Airbus, too, has big programs under way, including smaller A350 versions and A380 superjumbo derivatives.

With order backlogs of more than 4,000 jets each, neither company faces a dire threat.

"When they get going, they'll do well," analyst Aboulafia said of Boeing. "But they'll miss a golden opportunity to deliver a knockout punch - launching the 777X quickly and badly damaging the A350-1000 before it gets traction in the market." (Reporting by Alwyn Scott and Tim Hepher.)

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The new A350 seems to have become the stop-gap measure before the B777X gets pushed out into the market in the early 2020s. The high fuel prices recently has dealt a pretty bad blow on planes spotting 4 jet engines, with Airbus scrapping the A340 totally. As a result, planes which can carry heavy loads over longer ranges are selling very well in today's market, especially the B777-300ER.

However, that is set to change with the A350-1000 as it is able to carry more passengers and is even more efficient than the 300ER. But let's not forget about the B787 too.

Exciting days ahead in terms of how efficient jet planes can become.