Dubai Air Show

Civil sales heat up as deals bloom in the desert

 - November 15, 2009, 8:09 AM

The cash registers started to ring here at the 2009 Dubai Airshow yesterday with a modest but nonetheless welcome batch of airliner and engine orders. Airbus firmed up a new customer in Ethiopian Airlines, which converted a memorandum of understanding for 12 A350XWBs into a firm $3 billion order. Turbofan manufacturers shared a $2.6 billion batch of powerplant deals, and, combined with a flurry of smaller aircraft and systems deals, this took the tally for the first 24 hours of announced show business close to $7 billion.

The deal signed with Ethiopian Airlines marked the first-ever order for Airbus aircraft by the east African carrier, which also holds orders for the A350’s prime competitor, the Boeing 787. The contract raised the number of firm orders for the A350XWB family to 505 from 32 customers.

Ethiopian Airlines CEO Girma Wake said he planned to deploy the A350-900s on order from the airline’s hub in Addis Ababa on long-range routes to Europe, the U.S. and Asia, largely on sectors of between 11 and 12 hours in duration. The 787s, meanwhile, will fly medium-range routes of between seven and eight hours, he added.

From Airbus’ perspective, the signing marked the start of what it hopes will prove a lucrative show during a generally depressed time in the business. “We are very happy to be here today and signing something,” said Airbus CEO Tom Enders.

For his part, Airbus COO for customers John Leahy insisted that the down economy had little to do with the price Ethiopian ultimately paid for the airplane. “We’ve tried for several years to get Ethiopian,” said Leahy,“but this is not a price deal; this is a technology deal.”

Wake said plans call for deliveries to begin in 2017–the date targeted from the beginning of the negotiations–but that the airline might need some earlier slots, depending on competitive circumstances. “We hope this is the beginning of a very long relationship [with Airbus],” said Wake. “We think [the A350] will serve our market very well.”

Leahy added that Airbus has not had to spend much time filling open delivery positions, implying that perhaps finding earlier slots won’t prove so easy for airlines such as Ethiopian, however.

A contract announced Saturday by Rolls-Royce in effect pre-empted the Airbus-Ethiopian signing yesterday. The announcement, which involved a $480 million deal for Trent XWB turbofans to power the 12 Ethiopian Airlines A350s, raised Rolls-Royce’s order total for the new engine type to than 1,000.

Separately, Rolls-Royce has just won an order from Air China to power 20 Airbus A330s with Trent 700 turbofans. The contract, worth $1.5 billion at list prices, includes Rolls-Royce’s long-term TotalCare support. The deal also includes the retrofit of Air China’s existing A330s. Schedules call for deliveries to start in 2011.

In the narrowbody market, International Aero Engines yesterday announced that DAE Capital has chosen the V2500 SelectOne engine to power 20 new aircraft from the Airbus A320 family. Part of a 70-aircraft order the leasing company announced in July last year, the 20 airplanes will require $340 million worth of engines at IAE list prices. DAE expects deliveries to start in 2011.

In another deal involving Airbus single-aisle airliners, CFM International landed a $180 million contract from Tunisair to supply CFM56-5B engines to power 10 A320s on firm order. The airline, which also took options on two additional airplanes, plans to start taking delivery next June.

Finally, Libyan Airlines has become a new CFM International customer with its selection of CFM56-5Bs to power seven A320s on firm order and a further five on option. The value of the firm engine order totals some $95 million at list prices and the airline plans to take delivery by the middle of next year.