* Airbus, Boeing pushing fuel-saving airline models
* UAL seen ordering 100 Boeing jets, plus 70 options
* Firms prepare bids in South Korea fighter tender
* China's expanding rich seek large business jets
By Tim Hepher
BEIJING, June 10 (Reuters) - A summer battle for orders is
underway in the global jet industry, which gathers in Beijing on
Sunday for the first of two crucial events in two months,
pitting the world's largest planemakers against each other in a
race for deals worth $50 billion at catalogue prices.
The potential deals span all continents and every pattern of
powered flight from the largest airliners to warplanes and
luxury business jets, shielding aerospace workers from the worst
effects of a slowdown spreading from Europe's debt crisis.
But analysts say Airbus and Boeing are
having to offer sporadically hefty discounts to ride out
economic uncertainty, especially for maturing models or early
batches of new ones like the 787 Dreamliner.
Boeing is expected to win the fiercely contested annual
order race for the first time since 2006 as it catches up with a
decision by Airbus to revamp medium-haul jets, resulting in big
fuel savings for airlines on the Airbus A320 and Boeing 737.
The dominant civil planemakers are also positioning
themselves early ahead of next month's Farnborough air show,
with deals worth $14 billion announced in the past 72 hours.
Both companies have accused each other of waging a price war
to win hundreds of orders for the revamped A320neo and 737 MAX
respectively, and deny cutting corners themselves. Several
industry analysts say pricing is under pressure this year.
"Both sides are heavily discounting," said Richard
Aboulafia, aerospace analyst at U.S.-based Teal Group.
Although the madeover medium-haul jets offer airlines a
reduction of 15 percent in fuel, the industry's highest cost,
most carriers remain under financial pressure and some are
delaying deliveries to shore up their cash positions.
Airlines meeting in Beijing are expected to hear that their
industry body, the International Air Transport Association
(IATA), has left its forecast for 2012 sector profit unchanged
at $3 billion, but unease is growing as Europe discusses a new
bailout and China's economy slows.
Major characters in the aerospace industry are in the
Chinese capital negotiating on the sidelines of IATA's Beijing
summit, which comes weeks before another showcase, the July 9-15
Farnborough air show in Britain.
Chicago-based Boeing was relegated to the background during
most of last year's equivalent event as Airbus broke records
with sales of the A320neo, but later opted for a similar
This year will be different.
Boeing is preparing to hit back with a spree that could soon
include an order from United Continental for 100
narrowbody jets plus some 70 options, industry sources said.
It will want to persuade the top five aircraft leasing
companies led by AIG unit ILFC to put firm signatures on
undisclosed draft orders that U.S. aerospace analyst Scott
Hamilton estimates at 300-400 jets. These will include an order
from GECAS, whose General Electric makes 737 engines.
If all goes as some in the industry expect, Boeing could
double the number of firm orders for its revamped 737 MAX to as
high as 1,000 by the end of Farnborough. It may be European
Airbus's turn to be overshadowed, though possibly not without
surprises such as a new order for its A380 superjumbo.
Airbus on Friday reached 1,425 sales of the revamped A320neo
since it was introduced, giving it a share of 76 percent in
medium-haul, the market's hottest segment. Over time the balance
of power is expected to be roughly equal as the duopoly
Boeing has 451 firm MAX sales and its data suggests it has
at least 549 draft orders including 414 yet to be identified.
The industry's arch-rivals are also facing off indirectly in
the global arms market this summer with a competition to supply
dozens of fighters to South Korea.
Bids are due on June 18 and industry sources believe a
decision may come as early as September in an $8 billion contest
between Boeing's F-15, the Eurofighter made by a group including
Airbus parent EADS, and the Lockheed Martin
Asia, the Middle East and Latin America are re-arming to
replace ageing equipment or in the face of regional threats, and
Western suppliers are wooing them aggressively to try to offset
domestic budget cuts.
The global fighter market is pegged at $15-20 billion a year
excluding lucrative parts and upgrade deals. The share of
exports within this total hovered around 30 percent for the past
decade but is moving towards 50 percent, Aboulafia said.
Manufacturers are also seeing a steady rise in demand for
top-line business jets from China as the number of millionaires
in the world's second largest economy rapidly expands.
China accounts for a quarter of global consumption of luxury
goods despite a recent cooling of its economy, and suppliers
like Brazil's Embraer say China's super-rich are
jumping straight into buying the biggest business jets.
The key unknown is to what extent the crisis in Europe will
escalate, and throw fast-growing new economies off course.
For now, emerging market growth in transport rolls on.
On Friday, Boeing confirmed that Indonesia's Lion Air had
placed a draft order for model 787 Dreamliners after a record
order for over 200 smaller 737s. Finance for the purchase has
been heavily supported by U.S.-backed export loan guarantees.
The 787-8s are part of an early batch that had to be
reworked at significant cost and are expected by analysts to be
sold for less than half the $194 million price tag, driven down
by competition from Airbus's older A330. Boeing aims to focus
its efforts on improving pricing for the more popular 787-9
(Editing by Daniel Magnowski)
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