You are here

Singapore Airshow racks up US$12.3b in deals

This is less than the value of disclosed deals in 2014, but organiser says other indicators are up

BT_20160220_NRAIRSHOW20_2126422.jpg
NUMBERS UP: Leck Chet Lam is managing director of Experia Events, the show organiser, which notes that the number of undisclosed deals hit 40, up from 24 in 2014.

Singapore

EVEN those shopping for planes have turned more cautious amid a global slowdown, it would seem.

The Singapore Airshow drew to a close with US$12.3 billion in disclosed orders this year, down from US$32 billion in the previous edition of the biennial event.

However, organiser Experia Events has noted that there were 40 undisclosed deals this year, a sharp increase from 24 in 2014. Nearly half of the 40 were for maintenance, repair and overhaul (MRO), and nine were for aircraft.

sentifi.com

Market voices on:

Overall, more deals were inked this year, up 14 per cent from 44 at the last Airshow.

Early in the week, analysts had flagged expectations of a more subdued tally, pointing to economic headwinds and the dramatic plunge in oil prices, which translates to little incentive to phase out older planes for new, fuel-efficient aircraft.

South-east Asian carriers, in particular, appeared to play it cool after the heady buying sprees of recent years. There are more than 1,500 existing orders from the region's airlines, accounting for some 13 per cent of the global order book.

This is being compounded by over-capacity in this market, which is putting downward pressure on yields.

But at the Airshow this week, industry heavyweights such as Airbus, Boeing and Embraer dismissed talk that business from the region could take a hit as regional powerhouse China reports slowing growth.

Instead, they pointed to sturdy demand in the Asia-Pacific, fuelled by an emerging middle class with rising disposable income, and substantial backlogs.

Airbus chief operating officer John Leahy said at a briefing this week: "The middle class of the Asia-Pacific will be driving the world going forward. Unless you want to predict a global economic collapse, aviation will keep growing."

The European planemaker's backlog stands at more than 6,830 planes; last year's net orders had hit 1,080 aircraft, valued at US$141.6 billion.

Meanwhile, US-based Boeing projects that the Asia-Pacific will need 14,550 aircraft over the next 20 years, more than a third of the 39,050 aircraft required globally.

Speaking to reporters last Sunday, International Air Transport Association chief Tony Tyler noted that travel in China has remained robust despite the slowdown.

Still, the multi-billion blockbuster deals signed in 2014 were missing in action this week; for example, Amedeo's purchase of 20 Airbus A380 double-decker jets worth US$8.3 billion, VietJet snapping up 63 A320 family aircraft for US$6.4 billion, India's Air Costa plonking down nearly US$3 billion for 50 of Embraer's E2 jets and Nok Air scooping up 15 single-aisle Boeing 737s worth US$1.45 billion.

Instead, this year's modest tally of US$12.3 billion included Philippine Airlines' order for six Airbus A350-900s worth US$1.85 billion at list price, Beijing-based Okay Airways committing to 12 B737s for US$1.3 billion and Miami-based leasing company Aerolease Aviation's letter of intent for 10 Mitsubishi Regional Jets for US$940 million. (Airlines typically get a discount off list price for sizeable orders)

In addition, Vietjet ordered around US$3 billion worth of Pratt & Whitney's PurePower Geared Turbofan engines for its 63 Airbus A320neo and A321 aircraft.

Boeing also managed to squeeze in an order on the last trade day - typically a quiet one - for four Boeing 737 Max 8s worth US$450 million at list price, from Papua New Guinea flag carrier Air Niugini.

The 10 disclosed deals totalling US$12.3 billion consisted of four aircraft orders, two MRO contracts, two engine deals and two relating to the defence segment.

Experia Events managing director Leck Chet Lam said that the Singapore Airshow exceeded expectations this year. "If you look at trade visitors, VIP delegations, the number of deals announced - they're up. The key elements that we look at are on an upward trend."

Based on early estimates, the number of trade visitors rose nearly 10 per cent from more than 40,000 two years ago; the number of VIP delegations rose 3-5 per cent. This year, the show attracted nearly 60 French companies - the largest presence at the show by them so far; the Americans led with the highest number of exhibitors, 140.

In addition, 70 per cent of exhibitors have pledged to return for the sixth edition of the show, with Russia's United Aircraft Corporation, Sweden's SAAB and Indonesia's MRO player GMF planning to boost their presence at the next round.

About 95 per cent of the public tickets for this weekend have been sold so far, the organiser added.

Asia's biggest Airshow returns to the Changi Exhibition Centre in 2018, from Feb 6 to 11.

Most Read

No contents
Powered by GET.comGetCom