Who Bought That Plane? Airshow Buyers Seek Discretion Amid Trade Tensions

By Robert Wall and Andrew Tangel 

FARNBOROUGH, England -- Airline customers are shying away from putting their names on plane deals, worried it could exacerbate global trade tensions, Eric Schulz, Chief Commercial Officer of plane making giant Airbus SE said Wednesday.

Plane buyers have asked to remain unnamed "not to fuel the fire" on trade, Mr. Schulz said. That anxiety is particularly pronounced in Asia, he told investors.

"The world today is governed by the tweets we receive every morning from one side of the Atlantic," Mr. Schulz said.

That is creating pressure among airlines and governments, he said, adding that "some of our customers have asked as not to fuel the [trade] war."

The European plane maker kicked off the third day of this week's Farnborough International Air Show with the announcement of a deal for six A330-900 wide-body planes from an undisclosed customer. Even with additional deals including for the sale of two A350 long-haul jets to Uganda Airways and 25 A320neo planes to Mexico's Viva Aerobus, about half of the company's Farnborough orders so far are from buyers which aren't publicly identified. "Clearly we don't like undisclosed orders but we have to respect customers," Mr. Schulz said.

Boeing on Wednesday said it snared commitments for a total of 93 single-aisle 737 Max airplanes valued at $11 billion at current list prices from four unnamed airline and airplane-leasing customers. Some of the deals were final while others haven't been completed, said Ihssane Mounir, Boeing's chief of commercial aircraft sales and marketing. He declined to speculate about why the customers wanted to remain unidentified.

Boeing, the world's largest plane maker by sales and the biggest U.S. exporter, Wednesday also announced a deal from VietJet Aviation Joint Stock Co. valued at $12.7 billion before industry-standard discounts. The budget carrier plans to buy 100 of Boeing's 737 Max plane though the contract still needs to be completed.

Aerospace companies are gathered at Farnborough amid heightened trade tensions between the U.S. and China, as well as among Washington and a number of the U.S.'s traditionally close trading allies, including the European Union, Mexico and Canada. Industry officials said they aren't seeing an impact on demand for travel or planes, but are watching if trade could dent demand.

Mr. Schulz said he expected to exit from the air show with around 750 aircraft deals. Strong demand, particularly for single-aisle planes, could allow Airbus to charge airlines more for each, he said.

Mr. Schulz also said he was targeting orders this year for the A380 superjumbo, the Toulouse, France-based company's struggling flagship airplane. The A380 is popular with customers, but has struggled to win big orders because airlines worry about filling the double-decker plane that can seat more than 200 passengers.

Airbus has had to cut production plans for the A380 to about six planes a year in 2020 because of slack demand. Chief Financial Officer Harald Wilhelm said the program would lose money at that output level, but that efforts to cut costs to produce the plane would continue.

Boeing also has enjoyed strong demand for its rival 737 plane. The Chicago-based plane maker has said it is sold out until 2023. VietJet said it won't get its first 737 Max until 2022. Airbus A320s are sold out over the same period.

Write to Robert Wall at [e-mail] and Andrew Tangel at [e-mail]

(END) Dow Jones Newswires

July 18, 2018 16:32 ET (20:32 GMT)

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