European aircraft maker Airbus made a big breakthrough for its flagship A380 superjumbo airliner on Monday, taking the first order for the plane this year after a setback over cracks in the wings.
The provisional order, worth about $8.0 billion (6.0 billion euros) at list prices, came from Doric Asset Finance, a leasing group which will make the A380 giant accessible to many airlines via rental agreements.
The deal, important for Airbus in its efforts to boost sales of the aircraft, the giant of the skies, comes just three days after another milestone, the maiden flight of its new long-range A350 aircraft.
Airbus head Fabrice Bregier told the Wall Street Journal newspaper on the opening of the Paris Air Show at Le Bourget on Monday that the firm hoped to more than double its operating profit in the next two years.
It intended to raise the operating margin from 4.0 per cent to 10.0 per cent, he said, adding that this target excluded the launch costs of the A350.
Last year was a difficult one for the A380 superjumbo because micro cracks were detected where the wings join the fuselage.
Airbus is correcting the problem, but the manufacturer had taken no orders for the A380 since the beginning of 2013.
Boosting sales of the A380 is of particular importance to Airbus, which said in a statement that with this investment Doric would be able to offer the aircraft on tailor-made terms for airlines.
This would facilitate use of the plane by airlines around the world, Airbus said.
Doric Asset Finance has provided finance for orders by airlines such as Emirates and Singapore Airlines.
Under leasing arrangements, an airline enters into a rental agreement with the leasing company, thereby avoiding having to find the purchase capital from its own resources.
Airbus said that Doric was the third-biggest such company in the world, in terms of value, providing leasing arrangements for jumbo aircraft and was the biggest in terms of managing such deals for the A380 superjumbo.
Doric currently manages aircraft worth $6.0 billion, including 18 A380 airliners purchased under sale and leaseback agreements, so the latest deal represents a substantial increase for the leasing group.
The latest agreement in principle, or outline deal, is expected to be confirmed in a few months.
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More A380s available for lease from Doric after this purchase, and it is a real huge one, after Airbus receiving naught order for a good half a year of 2013. Perhaps this should kick start the ball and keep it rolling through the rest of the airshow.
Japan's Skymark Airlines on Monday announced it would buy four of Boeing's 737 MAX planes, the first Japanese airline to choose the US firm's new mid-range plane.
"It's a commitment to a minimum of four firm orders and we're still in discussions on how the transition of the whole fleet will go," John Wojick, vice president of global sales for Boeing, told reporters at the Paris Air Show.
Skymark currently has 30 of the US firm's mid-range 737 planes, and will have five more of those by next year. It then intends to gradually renew its entire fleet with the newer 737 MAX aircraft, which has yet to come into service.
At catalogue prices, Skymark's order for four planes announced on Monday is worth $402 million (301 million euros).
The air show just north of Paris kicked off on Monday, with Boeing and Airbus announcing a slew of orders as they battle for supremacy at the major event.
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A relatively small order for Boeing with a minor airline based in Japan.
Shares of India's private carrier Jet Airways slumped nearly 12.3 per cent Monday morning, after authorities last week delayed approval for Abu Dhabi-based airline Etihad to acquire a stake.
Jet shares fell as much as 12.27 per cent to a low of 411.6 rupees at the Bombay Stock Exchange.
The Jet-Etihad deal, announced in April, is the first overseas investment in an existing Indian carrier since New Delhi eased restrictions to allow foreign firms to take up to a 49 per cent stake in the country's airlines.
Etihad plans to pick up a 24 per cent stake in Jet Airways under the agreement.
India's Economic Affairs Secretary Arvind Mayaram said the proposal was deferred as they required more details of the effective control and ownership of the new firm.
The Etihad investment will allow Jet to reduce its hefty debt and expand its global reach by using the UAE airline's network.
In March, India's foreign investment panel cleared a proposal by low cost Malaysia-based AirAsia to set up an airline in India through a joint venture with the Tata conglomerate and another partner.
Indian airlines have been under pressure to grow due to fierce competition among carriers, with India's rapidly expanding middle class starting to favour air travel over the country's main mode of transport by train.
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The delay is not going to do any good now that the share prices of the company is dropping. Such issues should have been ironed out long ago. More communication between the various parties are needed, quickly.
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.
For almost 40 minutes on Thursday, a runway at Changi Airport had to be shut down and 10 flights delayed because an aircraft being towed somehow strayed onto a taxiway.
The New Paper understands that the aircraft, a Singapore Airlines Boeing 777-300, was being moved from a boarding gate at Terminal 3 when it was towed too quickly and accidentally entered the taxiway near the runway.
The incident, which happened around 12.30pm, was considered a case of runway incursion and, as a result, the runway was closed, delaying six arrivals and four departures.
One of the worst air disasters in history was the result of a runway incursion.
That happened in 1977, when a KLM flight attempted to take off while a Pan Am aircraft was still on the runway at an airport in Tenerife, Spain. The two planes collided, killing 583 people.
All runway incursions are seen as serious incidents.
Mr Paul Yap, a 42-year-old lecturer and course manager of Temasek Polytechnic's Diploma in Aviation Management and Services, said such incidents are very rare at Changi Airport.
He said: "There are many measures put in place to prevent such an incident from happening but, of course, human error can occur.
Controlled areas
"Runways and taxiways are all controlled areas and permission is needed from air traffic control to enter these areas."
He added that while such incidents may not lead to loss of life, possible consequences include damage to aircraft should they come into contact with other aircraft or vehicles.
Passengers would also be inconvenienced because of delays.
When asked about a possible reason the runway was closed for so long, Mr Yap said: "It could have taken some time to remove the aircraft from the narrow taxiway."
Mr Yap had held various posts at Changi Airport over seven years before joining Temasek Polytechnic.
When contacted, a Civil Aviation Authority of Singapore spokesman said the matter was being reviewed.
"We can confirm that no danger was posed to surrounding aircraft or personnel at Changi Airport."
An SIA Engineering Company spokesman said: "We are assisting the relevant authorities in reviewing the matter."
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Very careless move by the airport worker responsible for the towing of the aircraft. Such incidents should not be occurring in a high standard airport like Changi Airport. More measures will have to be implemented in order to prevent this from happening again.
Indian authorities on Friday delayed approval of a plan by Abu Dhabi-based airline Etihad to acquire a stake in Jet Airways, as they sought more details on ownership of the merged carrier.
The Jet-Etihad deal, announced in April, is the first overseas investment in an existing Indian carrier since New Delhi eased restrictions to allow foreign firms up to a 49 per cent stake in the country's airlines.
Etihad will pick up a 24 per cent stake in Jet Airways under the agreement.
The government's Foreign Investment Promotion Board deferred the decision on the 20.6-billion rupee (US$389 million) deal - the largest foreign investment in the Indian aviation sector - saying it needed more information.
"It (Jet Airways-Etihad proposal) has been deferred. We need more details of the effective control and ownership," Economic Affairs Secretary Arvind Mayaram told reporters in New Delhi after the panel meeting.
India's market regulator and competition watchdog has also sought more information from the domestic carrier about the transaction.
They want to make sure that Etihad's ownership powers in Jet remain in line with its plan to take a 24 per cent stake in the company's expanded share capital.
The delay comes as the Congress-led government, which is desperately seeking foreign investment to upgrade dilapidated infrastructure such as highways and ports, has been promising to make it easier to conduct business in India.
Under the agreement, which capped months of discussions between the two airlines, Jet owner-founder Naresh Goyal will retain 51 per cent of the airline.
The Etihad investment will allow Jet to reduce its hefty debt and expand its global reach by using the UAE airline's network.
In March, the foreign investment panel cleared a proposal by AirAsia to set up a joint venture airline company with the giant tea-to-steel Tata conglomerate and another partner.
Airlines had been wary of investing in India because of its infamous red tape and the two foreign carriers' investment had been seen as a sign that India's passenger market was too big to ignore.
Still, even with a rapidly expanding middle class that has switched to air travel from the country's main mode of transport by train, the airline market has been under pressure due to fierce competition among carriers.
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A little hiccup, but it will probably go through. With Etihad and AirAsia coming into the Indian market, it will be interesting to see how they will help the aviation field over there improve.
Airbus's new A350 plane glided smoothly through its maiden flight on Friday, leaving company executives relieved and brimming with confidence for the battle with Boeing that lies ahead.
Designed to help the European manufacturer catch up with its American rival in the market for long-haul, fuel-efficient planes, the new Airbus completed a faultless test flight from an airport close to the company's headquarters in southern France.
After just over four hours in the air, the new plane touched down to jubilant cheers from thousands of Airbus employees and aviation enthusiasts who had assembled to watch the landmark flight.
"We were on time and everything went perfectly," relieved Airbus boss Fabrice Bregier said after watching his "new baby" cruise past the crowds on the ground at a height of just 100 metres (yards) before looping round against clear blue skies and coming in to land.
Although the flight was only the first in an intensive year-long testing programme, Airbus needed Friday's showcase to pass off without any hiccups in order to maximise the potential for further orders at next week's Paris Air Show.
"I'm confident it will be a roaring success in the market," declared Tom Enders, the chairman of Airbus's parent company EADS.
Peter Chandler, Airbus's chief test pilot who was at the controls when the plane took off for the first time, sounded like he had just climbed down from a thoroughbred.
"We received the airplane from the final assembly line almost exactly two weeks ago and for the last week or so it has been quite obvious the plane is ready to fly and wanting to fly," the British pilot said.
"That was obvious this morning as it was clearly much happier in the air than it has been running down the runway and stopping all the time."
Boeing expressed its congratulations to its rival. "A new airplane is a very complex endeavour and this is a milestone the industry can celebrate together," it said.
Much like its competitor - Boeing's new 787 Dreamliner, in service since September 2011 - theA350 makes extensive use of light composite materials that significantly reduce fuel consumption and costs.
Arnaud Verneau, one of the flight engineers on board on Friday, revealed that the flight had been smoother and quieter than anyone had hoped for.
"We were even able to put it on auto pilot on after two hours, which we had not anticipated doing," he said, adding that the plane's lighter materials had not resulted in more noise inside the cabin.
"We will see as the tests progress but for the moment, it is the same (as a traditionally constructed plane)," he said.
More than 10,000 hours of ground tests had been done on the airliner before the flight, and over the next year five test planes will criss-cross the globe in the warmest and coldest regions, at low and high speed.
If all goes well, first delivery is expected at the end of 2014.
Confirmed customers so far include Qatar Airways, British Airways and Hong Kong's Cathay Pacific, and Airbus is hoping for a slew of new orders next week.
Boeing still dominates the long-haul market, and Airbus has positioned its A350 between the US firm's popular 777 and its new 787, hoping to eat away at both planes' markets.
The test flight may cast a shadow over Boeing at the Paris Air Show, where the US firm is hoping to prove its Dreamliner is back on track after recent technical problems with overheating batteries - one of which caught fire - forced the worldwide grounding of the fleet.
Christophe Menard, aerospace and defence analyst at Kepler Capital Markets in Paris, said that despite its own delays on the A350, Airbus was getting the plane out faster than Boeing managed with the Dreamliner.
Still, the 787 is ahead of the A350 in terms of orders - 890 versus 613.
Airbus says the A350 will consume six per cent less fuel than the 787 and 25 per cent less than the 777, and the year-long test flying phase will help verify that claim, as well as diagnose any problems.
"The risk is they find other things that they hadn't expected," said Nick Cunningham, an aviation analyst at the London-based Agency Partners.
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A new plane, another step forward in aviation. With its touted fuel saving capability, it will be a great saviour to our environment if it is proven to be true. Orders may still be lagging behind the Dreamliner but the Paris Air Show will prove to be a test bed of the saleability for both of them.
