Qatar, Airbus take centerstage
Qatar Airways looks set to double its order for the world's largest airliner with a purchase of five Airbus
Sources in the Gulf said the $1.9-billion order will be placed at the Dubai Air Show alongside $4.5 billion in deals with the same airline for approximately 50 of the revamped version of Airbus' smallest range aircraft, the A320 neo.
Airbus and Qatar Airways declined to comment.
One of the world's fastest-growing carriers, Qatar Airways took over the driver's seat at the airshow as it negotiated aircraft deals with Airbus and Boeing on the heels of a record order for 50 Boeing 777 aircraft from Dubai's Emirates
Airbus hit back at Boeing with more orders for the fuel-efficient A320neo aircraft, announcing an agreement to sell 30 of the aircraft to lessor Aviation Capital Group for $2.7 billion.
On Monday, Airbus predicted that demand for the revamped jet could push the company even higher than its target of 1,500 orders in 2011. It sold 50 of the planes worth $4.6 billion to Kuwaiti lessor Alafco
Powered by more efficient engines burning less fuel, the A320neo and Boeing's rival 737 MAX mark an attempt by the planemakers to defend their roughly equal share of the narrowbody segment, expected to produce $2 trillion in total sales over 20 years.
TOUGH CONDITIONS
As the euro zone debt crisis bites, funding for aircraft purchase is a headwind that plane buyers have to contend with.
U.S. lessor Aviation Capital Group's chief executive, Stephen Hannahs, told a news conference that the company had access to capital because it was investment grade, but that conditions in the market were tough.
The bank market, and the European bank market in particular, which has been a large supporter of the aviation sector, is undergoing a lot of stress right now, he said.
I suspect for the next six months, you're going to see banks in the euro zone sitting on the sidelines -- they won't be active participants until they sort out their capital structure. So there are going to be challenges.
On Monday, Airbus' sales chief said European banks lack of access to dollar funding, which is hampering aircraft financing, is a short term issue.
(Reporting by Nadia Saleem; Writing by Sitaraman Shankar and Praveen Menon; Editing by Amran Abocar)
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