Business Standard

China-owned firms behind anonymous Airbus air show orders - sources

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Reuters FARNBOROUGH, England

By Tim Hepher

FARNBOROUGH, England (Reuters) - The Farnborough Airshow is typically one of the world's most publicity-focused business events, with plane giants and airline entrepreneurs battling to win headlines for striking big deals under the roar of aerobatic plane displays.

Not so this week, when Airbus announced almost 200 orders from unidentified buyers, reversing the industry's PR rule book.

Airbus declined to discuss the identity of the buyers, but industry sources said the list was dominated by Chinese-related leasing companies, reflecting strong air travel demand.

Chief Commercial Officer Eric Schulz linked the reticence to global trade tensions, telling analysts some Asian customers had asked Airbus not to fan growing disputes. "Undisclosed or disclosed, either way the order is there," he said.

 

Industry officials said Airbus was also driven by a desire to boost its show tally by including deals with customers that were not ready to announce publicly or needed approvals. Boeing may also report at least one undisclosed order this week.

Various factors are at play when deciding whether and when to reveal order plans, but air show competition has something to do with the sequence of announcements, one source said.

Airbus listed orders for 80 A320neo narrowbody jets from an unidentified leasing company, another for 100 similar narrowbody aircraft, plus 14 wide-body jets: eight A350-900 and six A330neo - an anonymous haul worth $24 billion at list prices.

On Tuesday, Reuters reported that the first order for 80 aircraft came from China's ICBC Leasing.

Several industry sources said the largest order for 100 jets had been placed by Dublin-based global leasing giant Avolon, owned by China's HNA Group.

An Avolon spokesman said: "We are in constant dialogue with (manufacturers) and when we have an order to announce we will do that."

PR RULEBOOK

Airbus is currently tackling payment delays from HNA Group which led to a backlog of undelivered wide-body A330 jets, first reported by Reuters last week.

One of those planes has now been delivered and others are expected to follow soon.

Avolon is owned by HNA vehicle Bohai Leasing, but made changes in its bond structure earlier this year to insulate itself from the parent group's financial difficulties.

Avolon CEO Domhnal Slattery told Reuters this week those measures were working smoothly, but did not discuss order plans.

Planemakers often strike deals during the year with customers without disclosing their identity, especially in countries like China with complex government approval processes.

But at air shows, airlines and the financial backers most often enjoy promotion for their business plans after buying a new fleet, and firms like Airbus and Boeing invest in lavish facilities with space for press briefings.

Airbus is under pressure to show a rebound in sales after falling behind rival Boeing so far this year, though its new sales chief, Schulz, has played down the air show contest.

Despite the blackout on names, one piece of air show drama was still buzzing on Wednesday.

AirAsia boss Tony Fernandes has left Farnborough in suspense over whether he would fly in from Malaysia to confirm an order for Airbus A330neo planes or defect to the Boeing 787, though he said earlier this week he had "no plans" to make the trip.

One industry source said at least one jet was on standby to bring Fernandes to Farnborough at any sign of a breakthrough.

(Reporting by Tim Hepher; Editing by Mark Potter)

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First Published: Jul 18 2018 | 5:16 PM IST

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