Financiers keep tills ringing at UK air show

Reuters

Published Jul 15, 2014 09:47AM ET

Updated Jul 15, 2014 10:00AM ET

Financiers keep tills ringing at UK air show

By Tim Hepher and Victoria Bryan FARNBOROUGH England (Reuters) - The world's largest planemakers returned to business as usual on day two of the Farnborough Airshow, inking deals worth about $25 billion with the industry's top financiers on Tuesday after an ill-tempered clash over their latest aircraft designs.

The flurry of business deals involved names that mean little to most travelers but which keep the wheels turning of a $100 billion annual market for jetliners that remain in hot demand in emerging markets, as the West limps out of recession.

Confirming a Reuters report, Japanese-owned SMBC Aviation Capital signed the biggest deal of the show so far by number of units with a $12 billion order for 115 Airbus A320-family jets.

But while money flowed across the table between manufacturers and leasing companies, AirAsia (KL:AIRA) low-cost airline entrepreneur Tony Fernandes waited in the wings with what could be a $12 billion order for some 50 of Airbus's revamped A330neo. Airbus (PA:AIR) and AirAsia declined comment.

Airline deals have been few and far between at the world's largest showcase event, which coincides with growing concern about overcapacity and a string of airline profit warnings.

But leasing companies are putting their faith in steadily growing aviation traffic especially in Asia.

"We do see this as growing our business over the next 10 years," SMBC Chief Executive Peter Barrett told journalists.

MARKET SHARE

The air show has, however, brought renewed evidence of a battle for market share between Airbus and Boeing (N:BA) over sales of narrowbody jets, the backbone of most medium-haul networks.

It comes hard on the heels of two closely watched domestic contests in the UK where Monarch Airlines handed Boeing a critical win by dropping current supplier Airbus, while British Airways owner IAG (L:ICAG) stuck with Airbus after another duel.

But the star of the civil side of the show remained an aircraft that Airbus had not expected to make until recently - a revamped version of its A330 long-haul jet that Airbus says will be able to compete with the much newer Boeing 787 Dreamliner.

Airbus extended the provisional order book to 55 of the new aircraft on Tuesday and was expected to bring the total for the air show above 100 with the imminent announcement from AirAsia.