Farnborough expectations

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By admin July 2, 2014 14:30

Farnborough expectations

It is little over a week until Farnborough Air Show 2014, and what have we got to look forward to?

I think we all know that the main point of order at the show will be the A330Neo and the possible launch of the same, especially so given that Emirates, Virgin Atlantic, Delta and others are “most interested” in placing orders. Will the over-priced and slightly overweight Emirates A350 cancellation turn into an A330Neo order of some considerable size?

The logic is of course on the side of Airbus taking the plunge and going for it: there is very little R&D cost involved, it meets a market demand and, let us be true to ourselves, all Airbus needs do is put the list price well up from the current A330, sell it at a far lower price (more like the current A330 list price) and then attach aftermarket agreements to the orders to preserve margins in the long term. That way we all buy-in to the list price being high and preserving the current A330 values, we know it is not the case, but hey this is how the industry works – right?

Meanwhile though Boeing will be announcing a very large $3bn (list price) order with Monarch Airlines of the UK, while American Airlines Group is set to announce an order for 200 CFMi engines worth $2.6bn at list prices for their 100 A320Neos on order.

This is a bit of a blow to P&W to be sure and one wonders what concessions on price and aftermarket care CFMi had to give American. But remember, when we broke the original story of the AA Max and Neo order back in September 2011, we told you that CFMi was indeed the instigator in the room of the whole saga that forced Boeing to go down the Max road.

We stated then that P&W would not get much of a look-in on the Neo engine order. It has taken some time, but the end result is going to be as we reported.

admin
By admin July 2, 2014 14:30
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