Airbus set for Virgin, Germania order boosts at Farnborough
By Tim Hepher
FARNBOROUGH, England (Reuters) - Airbus (AIR.PA: Quote) is set to announce a key order for 8-10 of its biggest twin-engined model, the A350-1000, from Virgin Atlantic after beating Boeing to a scarce order for big jets as economic and political uncertainties overshadow the Farnborough Airshow.
The order, worth some $3 billion at list prices, could perk up Monday's opening of an event clouded by geopolitical uncertainty, including Britain's decision to leave the European Union and concerns over the state of the global economy.
British Prime Minister David Cameron will attend the opening day, where he is expected to finalize multi-billion dollar deals with Boeing (BA.N: Quote) to buy nine P-8A Poseidon maritime patrol planes and to upgrade 50 Apache helicopters.
Industry sources said Airbus's A350-1000 deal with Virgin Atlantic provided a shot in the arm to a 366-seat model promising greater efficiency but whose sales have slowed as Boeing develops a larger version of its 777, prompting a game of leapfrog between the only two makers of long-haul jets.
Airbus declined to comment and Virgin Atlantic was not available to comment.
Airbus and Boeing have enjoyed years of strong demand, helped by rising airline travel particularly in Asia and the Middle East and new, more fuel-efficient planes.
But with the industry's order backlog standing at a record 13,500 planes at the end of 2015, or 9.6 years of production at current rates, analysts are worried that economic risks - from slowing growth in China to Britain's move to leave the EU - could see orders dry up and some even canceled.
Larger, more expensive twin-aisle planes are likely to be most at risk. Indeed, industry sources said Virgin Atlantic, which has long deferred an order for six of Airbus's A380 superjumbos, looked set to finally cancel it. Continued...