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Airshow sees deals worth US$32b sealed
THE Singapore Airshow surprised on the upside with some US$32 billion worth of deals over the trade days, narrowly exceeding the US$31 billion recorded at the 2012 edition, fuelled largely by commercial orders from fast-expanding regional carriers.
This was welcome news for managing director of organiser Experia Events, Jimmy Lau, who had conservatively projected that this year's Airshow would underperform 2012 in terms of value. But, as widely expected, the number fell short of the US$200 billion or so seen at the Dubai Airshow last November, where the Gulf carriers Emirates, Etihad and Qatar placed massive orders for next-generation aircraft.
The biggest deal this week in Singapore came from Ireland-based leasing company Amedeo, formerly Doric Lease Corp, which firmed up an order for 20 Airbus A380 double-decker jets worth US$8.3 billion. Airbus also finalised an order with VietJetAir for 63 A320 family aircraft to the tune of US$6.4 billion as the budget carrier prepares to expand at home and in the region.
Boeing announced that Thai low-cost carrier Nok Air would buy 15 single-aisle 737s, comprising eight Boeing 737-800s and seven of the upcoming 737 MAX 8s, worth US$1.45 billion.
Bombardier inked firm orders and commitments for up to 17 aircraft totalling US$852 million, while Pratt & Whitney signed a 10-year fleet management agreement with Malaysia Airlines for its fleet of 43 PW4170 engines worth US$550 million.
And an order on Thursday from Indian start-up airline Air Costa for 50 of Embraer's E2 aircraft worth US$2.94 billion - with purchase rights for another 50 - helped boost the tally.
Even with emerging economies such as India and Indonesia grappling with weaker currencies in recent months, aircraft makers such as Airbus, Boeing and Bombardier this week downplayed concerns that the region might have more planes on order than it can absorb, pointing to rising passenger traffic and the need for newer, more fuel-efficient models, given stubbornly high fuel prices.
"(Demand) for smaller aircraft to ply domestic routes for the Indonesian market, India and even Thailand and Malaysia - I think that will trend up," said Mr Lau at a press conference yesterday. "There will be a fair bit of replacement of aircraft over the next few years. The MRO (maintenance, repair and operations) business will continue to flourish, as well as the growth for aviation training and the simulation market."
Singapore Airlines and Airbus, for instance, said this week that they would set up an $80 million flight training centre to cater to regional airlines.
Held at the Changi Exhibition Centre (CEC), the Singapore Airshow (Feb 11-16) attracted more than 1,000 exhibitors from the commercial and defence industries, and 279 delegations from 72 countries.
This year's edition also saw slightly more trade visitors, at over 40,000 from 125 countries during the first three trade days - compared with around 38,000 in 2012 - of which roughly a third were from overseas.
Highlights from the static display area this year included Airbus's upcoming A350 wide-body jet (which was pulled out of test flights to perform a flying demonstration here), Qatar's Dreamliner as well as business jets and military aircraft such as the V-22 Osprey. Some of these planes have already departed, with about 50 to be left on display when the Airshow is open to the public this weekend. Some 80,000 public visitors are expected to attend, with most of the tickets already sold yesterday.
Airbus's spokesman for Asia, Sean Lee, said: "In addition to presenting the A350 for the first time, we announced orders valued at almost US$15 billion. We were also pleased with the quality of visitors to the show, which included senior airline management representatives from across the region."
"It's a great venue. We've always been able to show the products very well here," said Roger Sperry, regional senior vice-president (sales) of Gulfstream, which brought its entire fleet of private jets. "It's a good place for people to do comparisons of the various models."
The biggest of 16 Airshows in Asia, the Singapore Airshow serves as a networking platform for firms, industry leaders and high-level government officials in the sector's fastest-growing region.
Experia Events said 72 per cent of the exhibitors from this year's Airshow had confirmed they will return in two years for the biennial event (Feb 16-21, 2016), with some pledging to take up more exhibition space.
The organiser is working with various government agencies to attract more firms from Asia, such as SMEs.
More than 1,000 meetings took place over the trade days, which could be the foundation for orders that might be sealed down the road.
At home, the Airshow generates economic spin-offs as well. A 2012 study showed more than US$250 million in spending going towards the economy.
In coming years, as Changi Airport expands to incorporate Terminal 5, the event organiser will need to look into how construction will affect accessibility to the CEC.
"What we will probably need to do is work with the authorities on accessing Aviation Park Road," said Mr Lau, referring to editions of the Singapore Airshow that will come after 2016.