Airbus sees regional demand for A220

Airbus’ CEO has played up the prospects for the Bombardier C-Series aircraft in the Middle East. (AFP)
Updated 18 July 2018
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Airbus sees regional demand for A220

  • Airbus acquired a majority stake in the C-Series program in October officially rebranding it in April to the A220
  • The US low-cost carrier JetBlue last week became the first purchaser of the aircraft since its rebrand

FARNBOROUGH: Airbus Chief Commercial Officer Eric Schulz has played up the prospects for the Bombardier C-Series aircraft in the Middle East and beyond, hoping carriers will use the single-aisle plane to expand routes.

The European plane maker acquired a majority stake in the C-Series program in October, officially rebranding it in April to the A220, strengthening its offering in the smaller jet sector in competition with arch-rival Boeing.

“Yes, I believe we’ll see orders in every region,” Schulz said when asked about the prospects for Middle Eastern orders for the plane.

“There are many people across the Middle East who are looking at the opportunity to integrate the A220 as a feeder to leverage their routes up to a point where maturity can be on with the single aisle.”

Schulz spoke to Arab News on the second day of the UK’s Farnborough International Airshow, which marked the rebranded A220’s first public appearance.

The US low-cost carrier JetBlue last week became the first purchaser of the aircraft since its rebrand, with an order for 60 of the single-aisle planes.

Airbus on Tuesday announced a commitment from what it described as “a new US airline startup” for 60 A220-300 aircraft, with deliveries due to begin in 2021.

The new airline is backed up by a group of experienced investors led by JetBlue founder David Neeleman, who is also an investor in TAP in Portugal and the controlling shareholder in Brazil’s Azul airlines.

The single-aisle market is expected to dominate commercial plane orders over the next 20 years, according to forecasts released by Boeing on Tuesday.

The US manufacturer expects demand for 31,360 single-aisle planes — representing nearly three quarters of total orders — over the period, an increase of 6.1 percent compared with similar forecasts published last year.

“This $3.5 trillion market is driven in large part by the continued growth of low-cost carriers, strong demand in emerging markets, and increasing replacement demand in markets such as China and Southeast Asia,” Boeing said.

In the face of such growth prospects, Boeing earlier this month agreed to takeover the commercial jetliner business of Brazil’s Embraer, a specialist in smaller passenger planes, in order to better compete better with Airbus in the segment.

Schulz downplayed suggestions of a downturn in orders from Middle East carriers, suggesting that any slowdown in orders from the region’s larger players would come alongside an uptick from other carriers.

“There might be a little bit of a slowdown for some airlines, and there is also some growth for others,” Schulz said.

“We are serving the market, and what we need to do is just continue to serve the market and take the opportunities and the challenges where they are and just deal with them.”

Schulz said that Airbus was “moving forward” with the details of its $16 billion A380 deal with Emirates struck in January.

The deal with the Dubai-based carrier for 36 additional superjumbo planes, the last major deal agreed by Schulz’s predecessor John Leahy, was seen as saving the beleaguered aircraft program, which has struggled to secure new orders.

“Clearly the relationship is fantastic,” Schulz said, having met with Emirates CEO Tim Clark on Monday.

“Clearly they have put a lot of emphasis on the opportunity that their A380 fleet is giving them. They need the plane, we need the plane to be delivered, and yes, it’s all aligned.”


World’s biggest sovereign fund worried about trade wars

Updated 21 August 2018
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World’s biggest sovereign fund worried about trade wars

  • The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter
  • Markets are worried about a trade dispute between the United States and China

OSLO: The managers of Norway’s sovereign wealth fund, the world’s biggest, expressed concern Tuesday about global trade tensions, which could heavily impact its value.
The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter, helping erase a loss of 171 billion kroner in January-March that was attributed to a volatile stock market.
The Government Pension Fund Global, which saw its total value swell to 8.33 trillion kroner by the end of June, manages the country’s oil revenues in order to finance Norway’s generous welfare state when its oil and gas wells run dry.
But Norway’s central bank, which runs the fund, said geopolitical and trade tensions presented a risk.
“It’s fair to say that increased trade barriers or even trade wars will not be beneficial for the fund as a long-term global investor,” Trond Grande, the deputy chief of Norges Bank Investment Management, told reporters.
Markets are worried about a trade dispute between the United States and China. Accusing Beijing of unfair competition, the US administration is considering slapping a new round of levies worth $200 billion on Chinese goods.
Talks between the two slated for Wednesday and Thursday aimed at resolving the dispute have however eased concerns somewhat.
Following US-Turkey tensions that sent the Turkish lira and the Istanbul stock market tumbling, the Norwegian fund said its assets there were worth less than the 23 billion kroner they were at the beginning of the year.
“We’ve seen the market rise for a long time, that there are different political and geopolitical events in the world that can affect the market, and we have to be prepared for the fact that (the value of) the fund can go down a lot,” Grande concluded.
The fund’s strong second quarter was attributed primarily to its share portfolio, which accounts for 66.8 percent of its investments and which rose by 2.7 percent.
Real estate holdings, which account for 2.6 percent of its holdings, rose by 1.9 percent, while bond investments, which represent 30.6 percent, remained flat.
Faced with falling oil revenues in recent years, the Norwegian government has been tapping the fund to finance public spending since 2015. But with oil prices recovering, the fund registered its first inflow in three years in June.