LDN - Business

Airbus scoffs at Boeing wins, plays down bounce-back hopes

[June 21, 2017] By Tim Hepher

PARIS (Reuters) - Airbus sales chief John Leahy scoffed at Boeing's claims about the efficiency of a new 737 jet that has been grabbing orders and headlines at the Paris Airshow, but played down expectations of a last-minute comeback to win the event.

Speaking to Reuters on day three of the June 19-25 show, Leahy said: "We will have some orders today, but today's isn't going to be one of our record air shows."

Regarding orders that Airbus could get over the rest of the show, Leahy added that such deals would be "nothing big, but real stuff" - an indirect reference to conversions from existing models that account for more than half of the orders announced so far for Boeing's newly launched 737 MAX 10.

Boeing leads the race for net new orders at the air show.

Industry watchers said the veteran Airbus sales chief could pull off a signature last-minute deal to avoid an unusual defeat at the European company's home event.

Leahy took issue with claims by Boeing that the Boeing 737 MAX 10 is 5 percent more efficient to operate than the Airbus A321neo, which has outsold the smaller 737 MAX 9 by about four to one.

"I am getting to the point where I may run my Pinocchio ad again with the stuff they are saying," Leahy said, referring to an advertising war between Airbus and Boeing in 2012 over conflicting claims on jet performance.

RESALE VALUES

Boeing says the 737 MAX 10 is a lighter plane with a longer wing, making it more efficient. Airbus says the A321neo has a larger and more efficient engine, giving it an advantage.

Boeing's development chief said on Tuesday Airbus marketing risked ignoring the "physics of the universe".

Leahy also said Boeing was putting some of its own sales at risk, rather than denting interest in the A321neo.

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A French gendarme patrols during the 52nd Paris Air Show at Le Bourget Airport near Paris, France, June 21, 2017. REUTERS/Pascal Rossignol

"I don’t think we have a real competitor to worry about there. I think the rest of their product line is going to be cannibalized by that aircraft," Leahy said of the 737 MAX 10.

"Either the MAX 9 or the MAX 10 is going to survive, but one of them has to go," Leahy said in an interview at what is likely to be his last major air show as he prepares to retire.

He also questioned whether the introduction of a fifth member of the MAX family would allow airlines to preserve the value of their assets for possible resale - a key barometer of aviation finance that influences both old and new prices.

"If you bought a MAX 9 in the past I think you have got to worry about your residual values," Leahy said.

Boeing Commercial Airplanes Chief Executive Kevin McAllister this week denied the 737 MAX 10 would have any financing issues.

Leahy said he was not worried about an order for 100 Boeing 737 MAX 10s from United Airlines, converted from other models.

"I understand that United have an agreement that they can convert to any member of the MAX family that they want to, and can convert back if they want to, so we don't see that as a competitor to having the A321 one day be introduced to United."

Asked to comment on Leahy's remark, a Boeing spokesman said: "They (United) selected the 10."

(Reporting by Tim Hepher; Editing by Mark Potter)

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