Billions in contracts reported at air show

June 19, 2013 at 8:54 AM
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PARIS, June 19 (UPI) -- Aerospace industry contracts for commercial aircraft, related systems and services worth billions of dollars are being reported from the Paris Air Show.

The sales and leasing agreements underline a recent study by PriceWaterhouseCoopers, which showed the commercial aviation market is surging and offsetting a soft defense sector.

On just the first day of the air show and exhibition, Airbus of France said U.S.-headquartered Doric Lease Corp. signed a Memorandum of Understanding for the purchase of 20 A380 wide-body passenger jets.

Doric has an aircraft fleet worth $6 billion, including 18 A380s acquired through sale-leaseback arrangements.

Airbus said Germany's Lufthansa Group also firmed up a previous Supervisory Board decision and signed for 100 A320 family of aircraft at the show.

Lufthansa Group has been operating the A320 family of aircraft since 1989 and the new order confirms Lufthansa's leading position as the largest Airbus airline customer and operator in Europe, increasing its order for the A320 type of aircraft to 299.

More than 150 of these aircraft have already been delivered, Airbus said.

A third deal announced by Airbus on the first day of the show was for the purchase of 50 A320neo aircraft by International Lease Finance Corp., a subsidiary of American International Group Inc.

ILFC was the first lessor to commit to A320neo aircraft with a 2001 order for 100 planes.

ILFC also signed a letter of intent, subject to final agreement, with Embraer of Brazil for the purchase of 50 E-Jets E2 aircraft. The deal includes options to procure 50 additional aircraft.

"The addition of the E-Jets E2 to our fleet is an exciting prospect, and we look forward to developing our relationship with Embraer," said ILFC Chief Executive Officer Henri Courpron. "These new aircraft would bring value and operational efficiencies to our customers and further position ILFC as the most responsive and resourceful aircraft lessor today."

Deliveries of the new aircraft will begin in 2018 and will be completed in 2023.

Embraer's order book from the show also features SkyWest Inc. of the United States, which signed a firm order for 100 E175-E2 aircraft, with an option for 100 more.

If all the orders are exercised, the contract has an list-price value of $9.36 billion.

In other deals, Boeing announced GE Capital Aviation Services intends to order 10 787-10X Dreamliners equipped with state-of-the-art GEnx engines.

Boeing also said Qatar Airways has ordered nine 777-300ERs.

PriceWaterhouseCoopers recently reported the commercial aerospace companies continue to be optimistic about the future -- air traffic is robust and steady, driving the aftermarket business, while the industry increased large commercial aircraft output by 18 percent and captured more than 2,000 large aircraft orders last year for the second consecutive year and the third time in history.

"As a result, there's a record backlog -- more than seven years at current production rates," PriceWaterhouseCoopers said. "And the industry is anticipating another record output in 2013."

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