Airbus to pass 1,000 net orders after IndiGo deal

Paris: Airbus looks set to exceed 1,000 net orders this year after securing a provisional deal with Indian carrier IndiGo for 250 revamped A320neo jets, its sales chief said on Wednesday.

In the first nine months of 2014, Airbus lagged rival Boeing with 791 net orders. Gross orders, before adjustments for model conversions or cancellations, stood at 1,077 aircraft.

"I think we are going to be comfortably over 1,000 net and over 1,350 or 1,400 gross (in 2014)," John Leahy, Airbus's chief operating officer for customers, said in a telephone interview.

Airbus has forecast that 2014 net orders will exceed deliveries, which it expects to be about the same as last year's company record of 626 aircraft handed over to customers.

Leahy said the IndiGo deal, the largest ever for Airbus by volume, would be finalized through an amendment of an earlier contract, a step that could be completed in "about 30 days".

There are no cancellation rights in the deal, he said.

The timing suggests the annual order race between Airbus and Boeing could be closer than previously appeared. Boeing posted 1,106 orders in the first nine months, or 1,000 net orders after deducting cancellations.

Leahy said some of the 250 aircraft would replace current-generation A320-family aircraft that IndiGo has ordered, but most likely not the A320neos it already has in the pipeline, meaning the transaction is chiefly driven by India's growth.

He dismissed recent warnings by some lessors and analysts that commercial jet demand has reached the top of a cycle as the opinions of "nay-sayers who are almost guaranteed to be wrong".

"I disagree strongly and this IndiGo transaction for 250 aircraft shows there is a lot of growth and dynamism left in the market," he added.

IndiGo had previously ordered 100 current-generation A320s, some 98 of which have been delivered. It was one of the first customers for the fuel-saving A320neo version in January 2011, with orders for 160 A320neo and 20 A321neo variants.

Demand for the latest fuel-efficient medium-haul jets being offered by both Airbus and Boeing has pushed up jet production, but Airbus has recently appeared reluctant to move as quickly.

Asked whether the new IndiGo deal would make it more likely that Airbus would match production increases recently announced by Boeing, Leahy said, "Every deal makes us more confident but this deal on its own does not change our production plans".

Fabrice Bregier, chief executive of the main planemaking subsidiary of Airbus Group, said last week the company shared Boeing's vision about the strength of aircraft demand, but now was "not the right time" to commit to a higher rate.

Asked about prospects in China, which last week signed a letter of intent to allow Airbus to open a cabin completion plant for the larger A330, Leahy said orders would follow soon.

By opening the plant, Airbus hopes to boost sales of the A330 to help smooth the transition to a more efficient version that, like the A320neo, boasts new engines - the A330neo.

Boeing is said to be fighting back with its newer but costlier 787 Dreamliner and combinations of smaller 737 jets.

Leahy said Chinese airlines had expressed interest in two current versions of the A330 - a regional version and a long-haul version featuring a beefed-up 242-tonne take-off weight - as well as the recently launched A330neo model.

"I think what we will see developing in the next couple of months are orders for all three (A330) aircraft," he added.